Dave Crawford's presentation on Retirement Fund Communication covers many questions including "Why do funds communicate to members?"

1. RETIREMENT FUND
COMMUNICATION
Dave Crawford CFP ®
Crawford Employee Financial Guidance

2. “THE GREATEST PROBLEM WITH
COMMUNICATION IS THE ASSUMPTION
THAT IT HAS TAKEN PLACE.”
GEORGE BERNARD SHAW

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4. WHY DO FUNDS COMMUNICATE TO MEMBERS?
TO PROVIDE THEM WITH THE
INFORMATION THAT THEY NEED TO PLAN
AND ACHIEVE A DECENT RETIREMENT?
Statutory requirements notwithstanding!

5. HOW EFFECTIVE CAN
COMMUNICATION BE IF IT
IS MADE TO PEOPLE WHO
LACK A BASIC GRASP OF
THE SUBJECT?

6. THIS SUGGESTS THAT LINKING
FUND MEMBER COMMUNICATION
WITH EDUCATION MAY BE MORE
IMPORTANT THAN IS GENERALLY
REALISED!

7. “The process workers should utilize in determining
their retirement income needs and funding
requirements is essentially the same as that used by
large defined benefit plans in determining their
liabilities and contribution requirements.
IN 2001 RICHARD GLASS WROTE IN THE
US

8. RICHARD GLASS CONTINUED
Unfortunately, the average worker is ill-
prepared to take on this task. To make
matters worse, he or she is unfamiliar with
the magnitude (or even the nature)* of the
problem.”
*MY COMMENT

11. HOW DOES ONE ENGAGE EMPLOYEES?
THAT IS THE $64,000 DOLLAR QUESTION

12. IT STARTS WITH COMMITMENT FROM THE TOP
• Retirement benefits need to be identified as part of the
reward structure
• Communication and education need to be
synchronised
• Information supplied to members must be useful to
them
• Members need to understand financial planning basics
WHOSE MONEY IS IT AFTER ALL?

14. Group Age Description Approach
Appie Up to 30
Not interested in retirement.
Into consumption, wealth
creation and investment
miracles
Presentations on wealth creation Encourage
compound interest calculation to get them
started. Offer reading material!
Yuppie 31 to 45
Starting to sweat the
responsibilities of house family
and understanding the
rudiments of retirement but
putting off till later.
Offer reading material, interesting talks on
investment and attendance at workshops.
Difficult because they are stretched but not
sufficiently motivated to save more than the
fund.
Serious 46 to 57
Aware of position in the
company. Not going to crack
MD. Worried about school,
university expenses and a
decent retirement.
Work shops, reading material, one on one
sessions. Groups need to save as much as
they can and pay attention to their asset
allocation because they are encouraged to
invest conservatively by most advisors when
the opposite may apply.
Resigned 58 plus
Retrenchment fodder.
Vulnerable to scams and keen to
do much in the time left.

15. Retirement Fund Member Life Cycle
Employee joins Scripted interview 1 with HR Officer Scripted interview 2 with HR Officer
Delivery promises
Introduction to Funds
Benefits explained
Comparison of benefits
Comparison of risks
Explanation of choices
Request for a fund choice
Request for beneficiary nomination
Confirmation of fund choice
Confirmation of fund membership
Confirmation of investment choices
Confirmation of beneficiary/ies
Handling queries
Ongoing membership 40 to 55 55 plus
Portfolio switches
Beneficiary changes etc.
Voluntary Required
Attendance at retirement
awareness workshops
From 6 months prior to retirement
Death
Disablement
Resignation
Retrenchment
Scripted interviews
With HR Manager
Individual counselling
where necessary
Retirement preparation with spouse
workshops and/or Individual counselling/coaching
Benefit statements..
Exit
To 40
Voluntary
HR Staff training in
retirement benefits
Queries etc..
Induction pack

16. Informing members and being guided by their
feedback will create a vibrant, responsive
communication environment from which
employer and employee will benefit hugely.
FEEDBACK LOOP

17. HOW DO YOU DO A COST BENEFIT ANALYSIS?
Not everything that can be counted counts,
and not everything that counts can be
counted.
Albert Einstein

18. Campaigns are usually evaluated on a cost per head basis
The benefit of a well informed workforce makes this work a
true value add.

20. Member’s needs don’t differ much between free-
standing and umbrella retirement funds
However communication and education tend to
be supplied very differently in the two cases

21. Communication and Education in Free-Standing Funds
• Employer management is often actively engaged with fund
• Trustees close to members – strong sense of representation
• Queries usually quick to be answered
• Members like proximity of trustees as a basis of trust
• Members feel a sense of ownership of “our” fund
• Member communications employer centred and specific
• Members less widely distributed

22. Communication and Education in Umbrella Funds
• Employer management often not actively engaged with fund
• Trustees not close to members – less sense of
representation
• Queries often not quick to be answered
• Trustees’ distance a source of mistrust
• Members feel little sense of ownership of “that” fund
• Member communications not employer centred and less
specific
• Members widely distributed

23. Communication and Education in both Fund types
There are advantages and disadvantages in both forms of fund
If employers are supportive members of either type of fund can be
adequately looked after. The great challenge is to get the buy in
from senior management, to proper education and supporting
communication as opposed to purely income generating activity
from sales organisations.

24. TO SUM UP
1. FORMAL RETIREMENT FUNDS ARE PART OF
THE RETIREMENT PROCESS NOT ALL OF IT!
2. MEMBERS DO NOT UNDERSTAND THE
PROCESS AS A GENERAL RULE!
3. CO-ORDINATED COMMUNICATION AND
EDUCATION WILL ENSURE THAT FUNDS
HAVE A MUCH GREATER EFFECT IN
HELPING MEMBERS HAVE BETTER
RETIREMENT PROSPECTS!

25. Thank you