Plan sponsors try to educate defined contribution plan participants about retirement, but the standard methods are not necessarily very effective at changing participant behavior. However, personalized programs yield dramatically different results, according to "The Evolution of Participant Communication: The Value of Personalization.," a report on the results of a study by Fidelity Investments.
The company looked at 245 plan sponsors that are using Fidelitys first|PERSON communication and education program. Rather than traditional mass mailings and generic classroom sessions, first|PERSON gives each plan participant individual information based on their life stage, salary, retirement savings account data and plan specifics.
The first|PERSON retirement checkup induced plan participants to nearly double their contribution rate from an average of 5.4% to an average of 9.6%. Furthermore, over 5% of participants made allocation changes, whereas the traditional methods prompted only 1% to 3% to do so.