Proven Communication Strategies for Successful Change

Transcription

1 Proven Communication Strategies for Successful Change Panel Discussion Copyright 2010 T. Rowe Price. All rights reserved.

2 Realism Change is inevitable except from a vending machine. Robert C. Gallagher

3 Consequential If you want to make enemies, try to change something. Woodrow Wilson

4 Apprehension There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Niccolo Machiavelli

5 Freedom Every human has four endowments self awareness, conscience, independent will, and creative imagination. These give us the ultimate human freedom... The power to choose, to respond, to change. Stephen Covey

6 Three Phases of Human Transition Ending: Letting Go Shock Denial Anger Fear Loss Relief Neutral Zone: Being in the Wilderness Confusion Frustration Stress Resistance Skepticism Creativity Exploration Impatience New Beginning Hope Energy Excitement Enthusiasm Adapted from Managing Transitions: Making the Most of Change, William Bridges, 2 nd edition, 2003

7 Key Metrics 342 change communications components 662 clients 259 New Fund communications 50 in small market client base 36% delivered electronically 83 Plan Change communications 20 in small market client base 16% delivered electronically

8 Panel Discussion

9 J.R. Simplot Company Challenge: Provide a gradual approach to help participants save for retirement slowly and help them maximize their company match savings over time Maximize participant inertia statistics show that employees tend to keep the plan s salary deferral rate and investment default Improve outcome of nondiscrimination testing for salaried employees Satisfied Safe Harbor requirements of a Qualified Automatic Contribution Arrangement (QACA) Solution: Communicated newly enhanced match, new QDIA (in compliance with the PPA), and mapping of old default assets Implement auto-enrollment, auto-reenrollment and auto-increase on an annual basis (4 years) Provide advanced education in November of each year to explain program and participant options Annual disclosure for opt-out instructions, time frames, and investment default Results: Participation rate: Plan A increased from 70% in 07 to 95% in 11 Plan B increased from 35% in 10 to 93% in 11 Salary deferral rate Plan A 6.5% in 07 vs. 7.32% in 11 Plan B 2.3% in 10 vs. 4.4% in 11 Maximizing Match Plan A 50% in 10 vs. 89% in 11 Plan B 29% in 10 vs. 27% in 11 Awarded MarCom Award for excellence in benefits communications

10 BorgWarner Inc. Challenge: Inform employees of move to safe harbor plan design Reinforce the value of company contributions, even to employees not receiving an increase Inform plan participants of investment option changes, including different default target- date funds Include annual compliance notices in the communication strategy Solution: Site-specific strategies to communicate safe harbor company contributions Targeted versions of notice mailed used graphs and examples to simplify complex message PowerPoint slides, FAQ documents, and Plan Summary handouts supported local HR Separate safe harbor, compliance, and investment change communications mailings to minimize confusion T. Rowe Price telephone representatives were provided with copies of all of the communications in order to best assist those with questions Results: HR reps were well equipped to cascade safe harbor changes, and the specific impact on groups and individuals Communications were effective only a slight increase in calls to the Participant Service Center Changes led to an increase in website traffic: 8% increase in visitors, 4Q10 v. 4Q09, while year-over-year total visitors decreased by 3.5% 64% increase in visitors to Investments tab following fund communication

11 SSAB Americas Challenge: Add Roth contributions Add and remove investment options Share class changes for two investment options Not all changes are applicable to all participants Translate complex changes into easy to understand language for participants Results: Materials well received by participants Consultative process minimized Plan Sponsor involvement Roth contribution measurement planned for April/May Employee meeting activity measurement following meetings in June Solution: Targeted campaign to deliver relevant messaging to diverse participant audiences Significant education and promotion of Roth feature to ensure comprehension of benefit Employee meetings to support introduction of Roth in combination with general investment education and retirement savings

12 Thank You to Our Panelists James Pegram - J.R. Simplot Company, Sr. Director of Human Resources Susan H. Yoo Senior Benefits Specialist, BorgWarner Inc. Katie Newberry - Manager Compensation & Benefits, SSAB Americas