Early-On in Employee Education and Engagement
CSI Advisory Services certainly knows a thing or two about retirement plans. Founded in 1971, it witnessed the DB to DC switch first-hand, and the innovation that came with it.
It’s one reason for its broad Midwestern reach, and deep expertise with the sponsors and participants in the geographic region.
It conducted 213 education-based group meetings and 2,208 personal interactions in 2018 alone, touching on everything from deferral rates to their investment selection.
“We serve mostly Indiana-based businesses ranging in a variety of sizes,” says Kristi Baker, managing partner with Indianapolis-based CSi. “Participant education and interaction have always been key to our operation and to our focus. We can give advice at the participant level and that’s really critical, so we spend a lot of time talking about their investment, beneficiary designations, outside assets, retirement gap analyses and everything else that goes into helping that participant make good decisions for positive retirement outcomes.”
In fact, they have a department solely dedicated to employee engagement and developing yearly messaging and goals, as well as “how we’re going to go about achieving that together as a team.”
One particular case involved a participation rate that was shockingly low.
“We took on a new client last year that was a public school system,” Kelli Davis, vice-president of retirement plan consulting with CSi, explains. “They had a retirement plan in place for quite a while, but they were never really tracking anything related to the plan.”
That lack of tracking meant a lack of awareness about who and how many were enrolled and saving.
“One of the first things that we did was look at the participation rate,” Davis says. “They only had 28 percent of their employees deferring into the retirement plan. They were shocked to find that it was that low, so we talked about the different options they (and we) could do.”
Adding auto features was of course discussed, to which the district was not opposed, “but they didn’t want to start there.”
The answer
The answer was something that’s worked well for the firm in the past when encountering a high number of non-participants—personalized emails with hypothetical balances and savings rates similar to what’s seen on Social Security statements. Providing such a service for 401(k) participants has been discussed by legislators and regulators for some time; CSi has something of a head start.
“We sent the personalized communication to all the non-participating employees and in the first two days we had 32 people take action out of about 100 non-participants. They are now up to a 56 percent participation rate after two months, so the response was just tremendous,” Davis says.
The feedback from the employees was affirming. “A lot of people said, ‘Oh my gosh, I thought I was participating. I didn’t realize that I wasn’t,’ or ‘Thank you so much for reaching out. I wanted to do this, I just didn’t know how,’” Davis concludes. “It was just a really good starting point with the plan. We now feel we have a better benchmark to measure the plan’s success going forward. That personal outreach was what that group of employees needed.”
Kristi Baker, AIF, C(k)P, CLU, ChFC, CASL is managing partner with Indianapolis-based CSi Advisory Services.
Kelli Davis, AIF, C(k)P is the firm’s vice president of retirement plan consulting.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
