With Crisis Comes Opportunity: The Importance of Participant Outreach During Hard Times

Winston Churchill famously said “Never let a good crisis go to waste” near the end of WWII as he was forming the United Nations. What he meant, simply put, is that crises often present opportunity. Sure, they can be disruptive and sometimes downright scary, but they are also just points of inflection.

Applied to Defined Contribution plans, points of inflection are when participants are more likely to engage with their financial benefits. There are non-crisis examples of these, such as changes to an investment lineup, a job change, or a life event such as the birth of a child. These are all times to have proactive outreach prepared, with accompanying education or calls to action.

Then there are actual crises like the COVID-19 pandemic and the resulting market volatility, geopolitical events like the Russia/Ukraine conflict, and most recently, significant inflation hikes. These also can be seen as inflection points, as they have an impact on individuals’ financial lives. In times of crisis, DC plan participants are looking to their employers or plan sponsors for leadership, outreach and guidance.

Whatever the “crisis,” sponsors should anticipate employee concerns and questions and have resources readily available in the form of:

• Talking points for call center reps who can handle one on one participant questions.
• Educational material to demystify whatever the crisis may be.
• In-person webinars or seminars lead by registered reps and company leadership.
  

Let’s go back to the market volatility example. We saw it in early 2020 with the COVID pandemic, and certainly in 2022, the worst year for markets since 2008 financial crisis. We created a sample educational brochure for our plan sponsor clients to help ease participant concern—the piece highlights the main tenets of retirement investing – staying the course (taking the long view), asset allocation, and diversification. This is also a good time for sponsors to reiterate how these strategies exist in their plans today, articulating the built-in diversification of default options like target date funds and the range of investments available within the core menu, intended to dampen volatility.

Sponsors can also point to other resources like one on one financial consultation or advice through the recordkeeper. Some participants may not know this is available to them, and an event like this is a good point of intervention to remind them. 

Case Study:

In 2019, just prior to the COVID pandemic, a client had just rolled out a successful participant program that involved several in-person events, complete with red carpets and on-hand one on one financial representatives. It was so well received, they wanted to do it again in 2020. Then COVID hit, which meant that the in-person events (one even included a food truck), would have to be canceled. Lockdowns and social distancing rules meant that the client had to scramble for a Plan B.

So the benefits team re-grouped and pivoted their plan for 2020: instead of the six in-person events they had planned, they arranged for 12 virtual events covering topics such as market volatility and retirement readiness. In addition, the team explored various other ways of reaching audiences. For example, using recordkeeper data, they developed special messaging for participants they identified as high-risk (e.g., those with less than ideal asset allocations based on their age), to encourage that they review their investing strategy.

In the end, 850 participants attended 10 virtual events that had been held by August, with 21% of those participants scheduling one on one sessions with a financial rep.

Turns out, employees like remote sessions. They’re easy, accessible, and most of all—convenient. So, in the long run, what was thought to be a less desirable engagement strategy (virtual versus in-person) turned out to be just the thing employees wanted. Not to mention, they’re great for plan sponsors, too.

And thus - necessity is indeed the mother of invention. In having to pivot, our client ended up developing a more nimble outreach strategy and garnered better participant engagement during what was a very challenging year for the whole world.

Bottom line here – in difficult times, whether in society, in your company, or in the financial markets – not communicating is not an option. DC plan participants are looking to you for outreach and guidance; this is your opportunity to build trust and highlight the offerings you carefully chose for your plan. Perhaps you’ll earn loyalty in return.