Plan Health. Redefined.

Transcription

1 Plan Health. Redefined. A PRESENTATION BY Michelle Morey MassMutual Retirement Services May 2016 FOR PLAN SPONSOR USE ONLY.

2 Is your retirement plan actually working? Topic Overview Evolution and the land of opportunity About Plan Health Putting new theories into practice: MassMutual s PlanALYTICS SM philosophy What does this mean for you?. 2

3 EVOLUTION AND THE LAND OF OPPORTUNITY 3

4 The evolution of employee benefits Shifting Risk From Employer to Employee HEALTHCARE Employers provide healthcare benefits during WWII Employer sponsored plans & gov t managed care High deductible healthcare plan & employee wellness EMPLOYER SUBSIDIZER ENABLER RETIREMENT DB + DC + Social Security Cash Balance + DC + Social Security Defined contribution plan + Social Security 4

5 The Media has said that the 401(k) plan is failing.. 5

6 You ve evolved shouldn t the way you approach retirement plans?. 6

7 Just get in and drive. Moving the Dial on Plan Health Make it easy for plan participants and plan sponsors to move towards plan health Offer an improved ride from point A to B, without having to worry about all the engineering underneath New Drivers of Plan Health Use advanced tools to power the engine that drives plan health. 7

8 New tools to drive Plan Health : Big data, Personabased marketing and behavioral finance 8

9 Big Data changes the game Evolutions in data collection and analysis allow us to prepare for and influence the future. Descriptive data analysis Captures past data to analyze current state compared to the past. Basis for most common plan health tools today. Predictive data analysis Looks at past data and finds trends to create future projections. Predicts the future based on current behavior. Prescriptive data analysis Takes predicted scenarios and makes recommendations to alter the future state. 9

10 Customization is everything Take a Cue from Retail Advertising: Use data to drive targeted messaging Persona development allows us to provide relevant, timely messages Analyze current state to meet where participants are today Use segmentation to provide targeted communications with the next best step for them Determine communication preferences to reach participants in their preferred medium: in person, in print, online or through innovative technologies 10

11 A primer on behavioral finance The Study of Emotion and Psychology Influencing Financial Decisions 3 Main Obstacles to Good Decisions: Inertia habits and fear of change Myopia inability to connect with future self Loss aversion myopia leads to short-term view, where present losses are magnified 11

12 Turning the tables Using Behavioral Finance to Turn a Negative into a Positive Plan Design Auto enroll with auto invest Auto increase Investment options to accommodate investors of varying sophistication Participant Engagement Connect participants with future selves Show projected monthly income to make future scenarios real Make it easier to take actions to improve outcomes 12

13 Putting new theories into practice: MassMutual s PlanALYTICS SM philosophy

14 Introducing MassMutual s PlanALYTICS SM At MassMutual, We Are Driven by a Single Mission: To help Americans retire on their own terms PlanALYTICS refocuses the definition of plan health to outcomes 14

15 Real data really matters The More Data Provided, the More Precise PlanALYTICS Can Become Some plan health tools use averages to fill the gaps??? For true plan health precision: Every part of the DNA is essential Gaps can t be filled with estimates or guesses??? VS PlanALYTICS connects real data at every level of the retirement plan: From each employee up through the overall plan-level measurement?? Missing data substituted with estimates?? Comprehensive data 15

16 MassMutual PlanALYTICS SM in action MassMutual PlanALYTICS SM brings precision and action to plan health. Prescriptive Solutions PARTICIPANT LEVEL PLAN LEVEL BETTER OUTCOMES: Retirement Readiness & Financial Wellness 16

17 MassMutual PlanALYTICS SM 2 Prescribe Smart Solutions to Drive Action: 2/3rd Plan Design and 1/3rd Employee Engagement Inertia Design Easy Choices Loss aversion Manage Losses Myopia Provide Behavioral Time Machines Save Enroll Automatic enrollment at 6% Auto enroll eligible nonparticipating Auto enroll new hires MassMutual RetireSMARt SM ENROLL campaign Quick Enroll cards Prerecorded message on SAVING Optimize match 30% up to 10% RetireSMART SAVE campaign Add 401(a) match to new hires not eligible for defined benefit Add Roth provision to plan Catch-up targeted campaign Promote RetireSMART aging app Examples of change in price of everyday household items in meetings Congratulate participants for taking positive action steps Save more Adequate savings rate Automatic deferral increase (ADI) 1% up to 10% RetireSMART SAVE campaign Quick Increase cards Stretch match 30% up to 10% Synchronize ADI with merit increases Plan health gap statements Promote use of paycheck tool to gauge impact of savings increase Tax saver's credit (April) Print materials depict visual of happy retirement scenes Employee meetings begin with imagine exercise SAVE presentation e4 meetings Save smarter Wise investment decisions Simplify investment lineup RetireSMART ALLOCATE campaign Education on target date investments INVEST presentation Invite employees to webinars on investment topics Education on target date investments Illustrate how inflation erodes returns of stable-value/lowyielding securities Promote RetireSMART Ready Tool (targeted mailing and demo) RetireSMART CONSOLIDATE campaign Print promotion of RetireSMART Ready Tool to encourage adding outside assets 17

18 MassMutual PlanALYTICS SM 3 Check up to Measure Improvements and Reassess A Precise Diagnosis of the Health of Your Plan Prescribe Smart Solutions to Drive Action Check up to Measure Improvements and Reassess Diagnosis: 62% Long-term goal: 79% Progress: 70% 18

19 2014 RetireSMART SM National Campaign Using personalization to drive action MassMutual RetireSMART SM Ready Tool Targeted Messages In person Meetings RetireSMART Website Call Center Enrollment Meetings with e4 SM Open rates averaged around 25% for personalized s Open rates averaged around 16% for non personalized s Source: MassMutual Retirement Services 19

20 The impact of PlanALYTICS SM Increases in Average Account Balances Changes in Savings Rates 35% 30% 32% 14.00% 12.00% 13% 25% 10.00% 20% 15% 10% 17% 8.00% 6.00% 4.00% 5% 2.00%.2% 0% 0.00% Comparison of data from March 2013 to June 2014 between clients using the PlanSmart Analysis Tools and those not using the tools. 20

21 What does this mean to me?

22 Why focusing on plan health matters Good for Employers Healthy plans parallel a company s ability to compete Healthy plans enable: Pricing leverage Employee productivity Potential for reducing long-term financial liability associated with an aging workforce Good for Participants Makes it easy to understand and take actions that improve retirement outcomes 22

23 massmutual.com/planalytics The Apple logo, iphone, ipod touch, and itunes are trademarks of Apple Inc., registered in the U.S. and other countries. 23

24 2015 Massachusetts Mutual Life Insurance Company, Springfield, MA All rights reserved. MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) [of which Retirement Services is a division] and its affiliated companies and sales representatives. RS /16