Kill the Jargon Before It Kills You
Who says retirement plans aren’t fun?
Not Jim Sampson, director of retirement advisory services with Hilb Group Retirement Services.
He recently landed a group plan previously serviced by a non-specialist advisor. The first thing he did upon taking over was to “attack” the pricing, which resulted in significant reductions with their existing provider.
He then moved to the plan’s design. The company is a home health care service mainly for disabled, underprivileged children. The workforce isn’t highly compensated, and English is a secondary language for many employees. The result was low participation in the plan.
“The company agreed to a match, which is always a huge step,” Sampson explained. “We implemented auto-features; auto-enrollment at 6%, an auto increase of 1% up to 10%, and target-date funds for the QDIA. We coupled that with a robust communication campaign. We spent a week onsite doing both group and one-on-one workshops. Once it all kicked in, their participation went from the low 40% range up to the mid-80%; it essentially doubled.”
The average contribution went from 2.6% up to 6.3%, so more people participated and more saved at a robust rate.
The “fun” came in the form of EvoShare, the micro savings-oriented FinTech firm and cashback company that puts spending rewards into retirement plans, 529s, and other investment vehicles.
“The home health care company is based in Florida, and pretty much everybody buys everything at Wal-Mart—groceries, clothes, you name it, they buy it there,” Sampson said. “I asked how many people go to Wal-Mart once a month and they spoke up and said more like once a week. I asked how much they spend, and one woman in the back laughed and said probably $200 each week. I said we should probably get Wal-Mart to pay for their 401(k).”
They thought he was joking, but he explained the EvoShare concept and that a percentage of their purchases goes back into their 401(k).
“They realized that money for their retirement plan doesn’t only have to come from their paycheck. It was a great example of how this plan went from just existing aimlessly to one that people were suddenly paying attention to and about which the employers were proud. It was a great transformation.”
The key was the week onsite and constant communication.
“People just figure it’s best to auto everything, but we need to be careful, or we’ll auto ourselves right out of a job,” Sampson concluded. “To me, it’s always been that marriage of plan design and communication. That makes a plan sync. You put the controls in place to get people into a position to succeed, and then you follow that up with that one-on-one conversation. But you have to speak their language. I don’t mean English or Spanish; I mean English versus financial because people don’t get what we’re saying half the time. You have to kill the industry jargon, or it will kill you.”
James F. Sampson, AIF®, C(k)P®, CPFA is Director, Retirement Advisory Services with Hilb Group Retirement Services.
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.
