New York Life Benefit Services does not care how old its customers are.
Instead of designing 401(k) educational seminars according to age groups, the company is designing its educational materials to match the level of confidence that individuals have in saving and investing. It is also allowing plan participants to decide which medium they want to learn through - whether it is print, video or the Internet.
The strategies are integral to the company's new defined contribution educational plan called The L{earn}ing System. Employees start their educational process by determining in which of two investor categories - the "getting started" or the "getting there" category - they belong.
A multiple choice test is given participants when they read the first issue of a magazine called "L{earn}," which is published quarterly by New York Life Benefit Services (NYLBSI) specifically for its 401(k) program.
Using the score they receive from that test, participants can place themselves in one of the two categories. Each of these categories has a corresponding icon that will indicate to plan participants which of New York Life's educational literature or magazine articles are directed towards them.
Some of the literature is designed for all participants, and so those sections are marked with a third icon that connotes this.
Most plan providers design educational seminars and programs for different demographic groups, said Peter Kooken, NYLBSI director of product services.
"What we've found, and it holds true, is age is not the right answer. It's more about financial confidence," Kooken said. The plan was developed after a survey of about 10 plan sponsors and over 100 plan participants, Kooken said.
NYLBSI has about $5 billion in assets under management in qualified retirement plans, most of which is in defined contribution business. It services 300 clients with about 400,000 plan participants.
The L{earn}ing System goes beyond a company's 401(k) plan and addresses other financial concerns such as budgeting, IRAs, credit card debt and even the value of bank checking and savings accounts. There is value in addressing these concerns because debt and poor budgeting, for example, may prohibit people from setting aside money for their 401(k), Kooken said.
"There's a whole bunch of roadblocks that's going to keep someone from investing," Kooken said. "People don't think about saving for retirement in a vacuum. You need to help them get over the hurdles to start with."
The educational program begins during the enrollment period. NYLBSI plans to put L{earn} magazine online as well as other educational materials.
