Benefits Products & Services

Talking retirement: One style doesn't fit all

Mass Mutual's targeted approach to plan participants

By Thomas A. McCoy, CLU

In a well-run business organization, management considers employees in their 20s and 30s to be critical to the firm's future. The owners and HR directors place a high priority on attracting and retaining good workers in this age bracket. Of all the employee benefits tools available to serve that end, a retirement plan might seem to be the least relevant. How many young people are motivated by a product with a payoff that is decades away?

Massachusetts Mutual Life Insurance Company is one retirement plan provider that is working to overcome this barrier of unrecognized need on the part of some young plan participants—a problem that can perhaps be best summed up by the Pennsylvania Dutch proverb: "We grow too soon old and too late smart."

"It appears that most people start planning their retirement when it's almost too late," says Kris Gates, assistant vice president of participant and interactive marketing for Mass Mutual's Retirement Services Division. "It's not easy to get a 22-year-old with student loans to start thinking about retirement. But it's not like college anymore. You can't cram for this test. You actually need to prepare early.

"By the time employees reach their early 50s and retirement starts to become a real thing to them, there's not a lot they can do at that point. They can't just get rid of all their expenses and start saving 30% of their income."

Last November Mass Mutual released a series of 10 educational videos on money management and retirement subjects narrated by Farnoosh Torabi, an independent personal financial journalist and Gen Y money coach. The company will use the videos, known collectively as RetireSmartTV, as part of Webinar presentations to retirement plan participants.

"When we brought in Farnoosh Torabi, our primary focus was to start engaging a more youthful retirement crowd," Gates says.

The videos consist of Torabi conducting unrehearsed interviews of "people on the street," asking them questions about financial management topics, including retirement. In each two-minute video she talks to intelligent-sounding people, who candidly admit to being confused about these subjects. Torabi and many of the interview subjects are Gen Y age.

Gates points out that when Gen X and Gen Y people think about money issues, including retirement savings, they aren't that interested in benchmarking themselves against the Dow or the NASDAQ; they want to benchmark themselves against their peers. So the videos showing a Gen Y person interviewing other Gen Ys gets their attention. Torabi works exclusively with Mass Mutual in the financial services field, but she brings credibility as a neutral third party. "We don't script her," Gates says.

The video initiative is part of Mass Mutual's multi-dimensional approach to communicating with plan participants, which includes phone, e-mail, the Web site, social media and in person. "We are prepared to deal with our customers in any fashion they want to interact with us," says Gates.

"Online education and communication with our customers is important to us now and will be in the future," says Gates. But he cautions, "You get in trouble if you make assumptions about how people want to deal with you, especially when you're talking about financial products."

Not only the medium, but also the message for plan participants is highly targeted. Gates explains that under the company's segmentation model, if a team in an office has 10 people in a plan, they might get 10 different messages based on the company's perception of their needs.

It's a strategy that has evolved over time, Gates says. "Looking back 10 years or so, we used to do sort of a 'one size fits all' model of education and communication where we would say, 'I think everyone in the plan needs to concentrate on saving more,' and then we'd dump a message to every participant that says 'save more.' Half the people were saving as much as they could already. It wasn't personalized, so you would lose a lot of the effect."

One constant in Mass Mutual's retirement plan marketing is the important role played by the advisor. "We're an advisor-centric organization," Gates emphasizes. "We choose not to bid out business if there's not a financial advisor attached to the plan. We don't go direct to plan sponsors."

The company uses a permission-based marketing approach to its plan participants, but it also consults its advisors before sending out a proactive campaign or message to participants (other than mandatory mailings such as quarterly statements). "We tell our intermediary advisor base, 'This is what we're going to be doing for your plans unless you prefer we don't; or if you prefer, we deliver you the information.'

"When we visit the work site, if the advisor wants to do the meetings because that's a way that they can add value, we give them all the materials, and let them jump in front and do it.

"We consider the advisor to be the quarterback," Gates summarizes.

As part of its strategy of individualized communication within its retirement plans, Mass Mutual makes extensive use of online seminars. Last year the company offered eight free online seminars as part of its RetireSmart^sm educational program, drawing a total audience of 9,000 participants coming from all 50 states.

The Webinar topics are chosen entirely by feedback from plan participants. Each seminar is led by an expert from outside Mass Mutual and features a 30-minute presentation followed by 30 minutes of questions and answers with the speaker. "We get between 200 and 400 questions submitted for every session," Gates says.

The seminar subjects can depart considerably from typical retirement planning ideas. Gates cites one seminar—titled Ready or Not, Retirement is Coming—that talked about ways to enjoy retirement when you didn't do all the right things with your retirement planning—such as little tricks to cut costs in retirement.

"We're taking an unusual approach in order to be more realistic with consumers," says Gates. "The plan sponsors appreciate that."

Mass Mutual has won awards for its defined contribution plans based on independent assessments of sponsors' and participants' satisfaction. Whether the company is aiming its message at older plan participants or younger ones, and whatever media it uses, it focuses on individual needs—of the employee, the sponsor and the advisor.