What we’re hearing.

Over the years, conventional pension plans have given way to 401(k) plans (403(b) in the not-for-profit sector) as the primary employer-sponsored retirement vehicle.

As a result, the watchword has become self-security: Employees have been responsible for participating in their plans and choosing their investments. As the last twelve months have shown, they have done so not without some peril.

It’s déjà vu all over again.

There is a strong parallel between 401(k) plans and today’s personal health insurance. Both have shifted the responsibility increasingly from employer to employee – in terms of cost and choice.

In most cases, the company-sponsored subsidy has been reduced. In some cases, it has evaporated altogether. And in many cases, people have left their employment and are purchasing health insurance on their own.

According to McKinsey & Company, the number of people buying their own health coverage will rise to 20 million in 2010, up 12% from 2007, largely because of lost jobs and employers cutting workplace benefits.¹

Education: the key to self-sufficiency.

In the early days of 401(k)s, employees didn’t know an asset allocation strategy from a prospectus. Over the years employers and investment firms placed a heavy emphasis on educating them so they could make informed decisions. In fact, it became their fiduciary duty to do so.

That opportunity is upon us once again. Employees and consumers are crying out for well-founded information – which has created opportunity: education.

What you can do.

As an employer or a marketer, whether it’s health coverage or other employee benefits, here’s what you can do to capitalize:

• Put together an educational primer on comparing options and put it online – that’s where people are headed for their information.
• Without insulting the audience, assume that knowledge of basic concepts around cost, coverage and other features are minimal.
• Deconstruct cost: In healthcare, make it clear that it’s not always about the premium. In retirement-savings plans, watch the fees.
• Keep it simple. Don’t obscure the message through unnecessary embellishment.
• Don’t leave them hanging. They want help, so make sure information from a highly qualified source is readily available online or by phone.

How we can help. We can help your prospects better understand their options soyou can increase sales, boost satisfaction and improve retention. We welcome the opportunity to help you educate your customers while you grow your top line.

¹ The Wall Street Journal, June 24, 2009. © 2009 Dow Jones & Company, Inc.
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