Retirement may be the last thing on the minds of millennials today. Many delay financial planning until it is absolutely required.
This is also a generation burdened by student debt and extremely competitive work environments, with lesser opportunities for personal development than in the past. Many want to retire early.
According to recent surveys, more than half the millennials in the workforce may not have not started saving for retirement. However, some studies say that many millennials have been contributing to a workplace retirement savings plan since their early 20s.
A new study has revealed that millennial participants in retirement plans are actively seeking more information and are paving the way for social media to become a top source for retirement education. This was one of the key takeaways of Market Strategies International-Morpace’s Cogent Reports DC Participant PlanscapeTM study, presented at the SPARK Institute Advisory Board Meeting in Florida, earlier this month.
The data reported in this Cogent Reports study are representative of the “engaged plan participant” universe. The study, by Market Strategies International-Morpace, was based on a Web survey of Defined Contribution (DC) plan participants with a current and/or former plan. They defined “engaged” plan participants “as those who are 18 years or older and contribute at least 1% to a current plan and/or have $5,000 or more in at least one former plan”. The survey (April 30 to May 18, 2018), had a sample size of 4,986 plan participants and evaluated 35 DC plan providers.
Among other topics, the study included questions on the communication expectations of today’s plan participants.
According to the findings of the study, participants welcome regular contact from plan providers. Preference for digital communication such as text messages and push notifications, the study said, is on the rise.
The findings also highlight the growing importance and relevance of digital marketing initiatives. Successful pursuit of cross-sell opportunities by providers, the study said, requires “an established presence on social media along with texting and mobile app push notification capabilities”.
Performance is key, so is online capability
The study also revealed that more participants with former employer-sponsored retirement plans (ESRP) assets are “putting the brakes” on any rollover activity and keeping their savings in-plan, “influenced most by performance and choice of investment options”.
However, the study added, in addition to good performance, firms that “demonstrate success in other key drivers of participant satisfaction – website and online capabilities and retirement planning tools” are likely to be better equipped to weather market volatility in the future.
On the topics of where participants get information and on how participants felt about e-delivery, the findings include the following data points:
(1) Millennial participants are paving the way for social media to become a top source for retirement education
(2) Facebook and YouTube are used most often as social media sources for ‘know-how’ on preparing for retirement
Among other findings, while e-mail continues to be the top-cited mode for enrollment and reminders among participants, preference for text messages and push notifications is increasing. More than two-thirds of plan participants receive their quarterly account statements electronically, and there is a strong level of acceptance for default e-delivery.
Congruent’s CORE suite of solutions go a long way in achieving the above objectives of leveraging the digital medium to engage participants. To know more, visit here
This is the third of our SPARK Forum 2018 series of blog posts. Read the first and second posts here and here.