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Technology and Retirement Plans: Boon or Boondoggle?

Practice Management

Technology offers a dazzling array of ever-expanding options for retirement plans and participants. But not everyone is interested in tech. Some recent blog entries suggest ways to heighten the experience, as well as non-tech ways to serve a plan and its participants.

Technological advances march on, and a universe of information is available in the palm of one’s hand. And that includes financial information. “Employees are making important financial decisions on digital devices, including those that affect their retirement,” writes Voya Financial in “Digital Fiduciary Overview: Overseeing Retirement Plans in the Digital Age,” a recent post on the Voya Insights blog.

But on the other hand, technology may not be the be-all-and-end-all of informing plan participants. “Just because the technology is available and is there, doesn’t mean it’s what everyone in your plan wants or needs,” writes Scott Gehman, a retirement plan consultant for Conrad Siegel in “High Impact Tips for 401(k) Plan Sponsors: High-Tech or Old School?” a recent post on Conrad Siegel’s blog. “Don’t assume everyone wants, needs, or will use the internet,” he adds.

Techno-reticence, Gehman suggests, for the most part results from reluctance to visit another site, memorize another password and monitor another account number — and also because some people will not use the web.

These divergent factors mean that plan sponsors may find a variety of strategies and means useful in getting information to participants and giving them access to it — and that applies to  tech and non-tech tools.


Design is central to use of technology in communicating with participants, Voya notes. It cites “Saved by Design,” an October 2018 study by Saurabh Bhargava and Lyn Conell-Price of Carnegie Mellon University, Richard Mason of the University of London and Voya Financial, and Shlomo Benartzi of the University of California at Los Angeles, in which they found that enhancing an enrollment website’s design had a positive effect. They found that with design improvements, 15% more workers personalized their enrollment.

And digital presentation matters on personal devices as well, argues Charlie Nelson, CEO of Retirement and Employee Benefits at Voya Financial. “In an age when many individuals are making important financial decisions on their digital devices, research tells us that the design of screens — how information and choices are presented — can dramatically impact the way workers save,” he says, adding, “Because digital design can have a strong influence on long-term results, it is important to use design elements that support a plan sponsor’s ultimate goal of helping their employees achieve a secure financial future.”

Ultimately, changing digital design can result in a plan and the accounts in it better accomplishing why they exist in the first place — improving participants’ financial security, Voya suggests. For instance, it cites two studies that show that digital design changes can increase contributions. The researchers for “Saved by Design” found that with design improvements, employee contributions to their retirement accounts were 10% higher; in addition, in “How Do Consumers Respond When Default Options Push the Envelope?” authors John Beshears of Harvard University and the National Bureau of Economic Research, Shlomo Benartzi, Richard T. Mason of City University of London and Voya Financial, and Katherine L. Milkman of the University of Pennsylvania said that digital design improvements offer employers an opportunity to increase the default savings rate.


For those whose preference is not electronic, Gehman offers five suggestions:

  1. Make it possible for participants to perform basic plan functions without having to go online.
  2. Provide in-person education meetings for participants.
  3. Focus on effective and improved messaging.
  4. Pay attention to how participants engage and learn, and adjust education systems and tools accordingly.
  5. Consider a paper-based enrollment system.

Paper-based systems may at first blush seem counter-cultural, but not to Gehman — nor, apparently, to his clients. “We have some clients with very successful plans whose enrollment system is largely paper-based. I have a client with nearly 150 participants, of which only three had chosen to receive electronic statements at this writing,” he says, concluding, “Suffice it to say, we can’t depend on the Internet to educate their employees.”