In this issue of Ideas, we look at how cutting edge organizations employ data analytics, plan differentiation and targeted communication to take full advantage of their DC plans.
This issue will help you:
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DC plans generally cannot discriminate person by person. Yet they can treat groups of employees differently.
Cutting-edge organizations may use a variety of criteria (e.g., role, location, business unit) to segment their employees. Consequently, a DC plan can use roles rather than performance to decide which groups of employees to reward.
In the publication, we highlight a program that segments its employees by role — strategic, core, requisite and non-core.
The next step in exploring how to use a DC plan to reward specific segments of employees, those in strategic roles for example, is a detailed analysis of the organization’s plan data.
Does the organization know precisely how its plan rewards employees in strategic roles? If not, it is likely that they receive the same benefit level as everyone else.
Further, they may not be taking full advantage of the current plan, which means they may be receiving a lower benefit than other employees.
Analyzing the plan beyond the usual statistics (e.g., reviewing employee savings rates by age, career level, business units and performance) will demonstrate how different groups, including employees in the organization’s strategic roles, benefit from the DC plan.
Some organizations have successfully redesigned their DC plans to offer top benefits to employees in strategic roles.
This may sound like a radical idea since most people think DC plans are egalitarian vehicles that offer all non-executive employees the same rewards.
However, just as organizations do not think twice about rewarding their employees in strategic roles with differentiated pay (e.g., incentive compensation programs) they can also set different formulas for their DC retirement plan contributions.
In the publication, we look at tactics for differentiating an organization’s DC plan to reward its employees in strategic roles.
A targeted communications campaign develops messaging and information for a specific audience so they learn something new, feel something different and take action.
Before starting a campaign aimed at a group, an organization needs to ascertain:
Once the organization understands the shared characteristics and issues of the target audience, it can create a communications strategy that matches programs and interventions with the behavior it wants to drive for the targeted employee group.
Sibson’s strategic deeper dive into DC plan data helps plan sponsors analyze changes in staffing based on growth, unexpected early retirements and aging workforce populations to inform plan design improvements and develop/improve employee communications.
If you’d like to understand more about how you can better utilize your DC plan, get in touch.
Senior Vice President
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