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A Closer Look at Benefits Administration in H1 2016: Part 2

NelsonHall’s Targeting Benefits Administration Services market analysis report, which will be published later this month, finds that the top driver for organizations outsourcing benefits administration is to improve the participant experience. Accordingly, both retirement and health & welfare (H&W) services vendors have been investing heavily in their respective areas to enhance the employee experience. Here I take a brief look at recent initiatives in the retirement space.

DC administration vendors began to provide education, resources, and mobile access to participants a few years ago to assist in retirement preparedness. In many cases, however, the information and tools provided were often generalized by various life stages, and usually required initiation by the participant.

To address the problem, many companies have incorporated automatic enrollment and automatic escalation features into plan designs to help employees that do not have the time or aptitude to plan for their retirement. And for participants that have become more proactive about their retirement income, they can take advantage of a wide variety of enhancements that DC administration vendors have implemented.

Some of the simplest improvements include:

  • Expanding enrollment capabilities into 401(k) plans through mobile devices, e.g. John Hancock RPS’ MyLifeNow app
  • Revamping participant portals to facilitate improved participant interactions, tailored education, and additional tools to assist in informed decision-making. For example, T. Rowe Price’s Workplace Retirement portal includes an enhanced retirement income experience that allows participants to create their own personalized confidence numbers as well as the ability to aggregate and view balances, including outside assets.

It’s also important to note that these changes are not just happening in the U.S. For example, Mercer relaunched its superannuation offering in Australia to increase member engagement by focusing on digital transformation, customer management, marketing automation, and workforce management.

Moving along the continuum, enhancements have expanded beyond a focus on retirement to address other financial issues, such as budgeting and debt management. Examples include:

  • Fidelity’s Plan for Life Financial Wellness offering
  • Empower Retirement’s partnership with DoubleNet Pay for its new service that helps participants pay bills, pay down debt, and save for emergencies. 

Some of the most advanced changes within DC administration include personalized information. An example is Aon Hewitt’s financial wellness initiative, which uses information from an individual’s self-assessment to push messaging and tools that align with the participant’s situation and goals.

In part 3 of this series on recent developments in the benefits administration outsourcing market, I will focus on how H&W services vendors have been enhancing the participant experience, and what can be expected in the future.

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