Simple Communication Entices Participants to Provide Beneficiary Information
By: Great-West Retirement Services®
The Challenge
When the Commonwealth of Pennsylvania’s Deferred Compensation Program decided to renew its partnership with their retirement services provider, Great-West Retirement Services®, they decided to address a nagging challenge – updating participant beneficiary information. Researching information transferred from the previous record keeper became a labor-intensive process. Although Great-West Retirement Services has made online beneficiary recordkeeping available since 2003, plan participants were not using it. So the Commonwealth took an opportunity to reach out to this segment of the participant base with a direct mail letter.
The Solution
Even though updating beneficiary information was an important initiative, the project didn’t have a significant budget. According to Gregg Seller, senior vice president of Government Markets for Great-West Retirement Services, the retirement provider made a virtue of necessity and developed a simple, straightforward communication to encourage participants to designate a beneficiary. A one-page letter informed participants that they had no designated beneficiary on record with the program and told them they could easily designate beneficiary(ies) by completing an attached form or by going online to the program’s Web site to provide the required information.
The mailing also included a postage-paid reply envelope that made it as simple as possible to return the form. In essence, the process cost the participants nothing but the few minutes needed to complete the form. The information collected with the paper form would then be uploaded to Great-West Retirement Service’s online recordkeeping system.
The communication’s low-key approach underscored the simplicity of the update process. The letter provided easy-to-follow instructions for the paper form and Web-based option. The letter also avoided overwhelming participants with facts and figures, simply stating that no information was on file for the participant.
The Results
Over 14,800 program participants received the letter at their homes, and the response exceeded almost everyone’s expectations. Even though the initiative’s limited budget didn’t allow for any follow-up communications, more than 4,300 recipients of the letter provided the missing information – a response rate of almost 30 percent.
According to Tony Hines, Assistant Director, State Employees Retirement System, Commonwealth of Pennsylvania, “The success of our beneficiary campaign shows that a well-designed, well-executed communication can improve the quality of service that sponsors provide.” Seller added, “It also shows that a ‘less is more’ approach can sometimes be the best choice for motivating participants.”
End Note
While the designation of a beneficiary may seem to be a trivial issue, the lack of a proper designation in a retirement account can have significant consequences. In fact, a case recently went to the U.S. Supreme Court involving an account where a participant did not remove his wife as the beneficiary after they divorced. The participant died and his estate sought to claim the account assets. So, a simple initiative like the one initiated by the Commonwealth of Pennsylvania could help save many workers from complex problems in the future.
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