Like we didn’t already have enough hurdles with retirement, a review of plan enrollment experiences found that while participation was up overall, support and guidance during the online process was severely lacking.
Boston-based research firm DALBAR looked at traditional and “quick” retirement plan enrollment experiences and found a “downturn and occasional stagnation” in the already underwhelming guidance offerings found during online enrollment. They reported a decline in enrollment instructions, answers to frequently asked questions and relevant support for various enrollment tasks. Calling the lack of guidance “unfortunate,” the firm noted the already low prevalence of readily available contact methods presented to enrollees.
Of the 23 traditional enrollment paths that were reviewed, basic information was often hard to find. Only 30% of online platforms displayed contact information without the need to visit a separate page. And none of the seven express enrollment processes that were reviewed provide guidance within the enrollment area. However, the report found that one of the higher ranked companies, Securian Financial, does help participants by providing guidance through every step of the process, along with an always-present contact menu that contains multiple options for reaching out for assistance.
One key step in the retirement plan enrollment process seems to have gotten better. Improvements in the ‘designating a beneficiary’ process were seen with a number of firms now proactively notifying enrollees about the ERISA requirement to designate one’s spouse as primary beneficiary. Additionally, they provided the paperwork that is needed to waive the requirement. Principal aced the beneficiary element of the enrollment process and achieved a perfect score for the second consecutive year–the only firm to score perfectly in 2021.
The so-called “quick” enrollment process actually seemed to live up to their name in the latest findings. A solid 100% of those processes allowed users to select contributions, investments, and beneficiaries in a minimal period of time with just a few steps. John Hancock Retirement was the highest-ranked quick process, with DALBAR saying that it “maintained a great balance of expediency without losing the instructional elements that were absent from some of its traditional counterparts.” Additionally, OneAmerica’s quick process earned second place honors by condensing each step into a separate partition on one page, allowing all enrollment elements to be contained within a single window.
Lynn Brackpool Giles is a contributing editor to 401(k) Specialist. Giles is a former Managing Director of Communications and Consumer Services for the Financial Planning Association (FPA), where she oversaw all corporate, legislative, and consumer communications. In her current journalistic practice, she is a frequent contributor to numerous financial services industry publications.
It’s great to know that there are improvements when it comes to the firms proactively notifying enrolled regarding their requirements. I can imagine how it would be helpful to have a Retirement Planning Speaker that my mom can listen to so that she is prepared as well. She will be turning into a senior in five years time, so it can help her prepare well if she can hear tips from a professional first.