Retirement Change Communication

A phased communication strategy while implementing a new retirement program allowed this hospital to engage employees and attract and retain talent. 

Background:

A community hospital in a suburb of Cleveland, Ohio faced numerous challenges as it competed with area health systems. To attract and retain a talented workforce, the hospital emphasized providing employees with competitive benefits. The hospital was proud of its retirement program, which included both a traditional defined benefit pension plan and a 401(k) savings plan. It recognized, however, that its 2,400 employees represented a changing workforce: longer service employees who want the security of a pension plan and employees with less service who want a retirement benefit that provides flexibility and portability. Furthermore, the hospital could not avoid addressing pension costs.

Challenge:

With the support of Findley, the hospital created a retirement program that minimized its impact on employees. Some employees remained in the current retirement program while others moved to a newly created plan that gave them more flexibility and reduced employer costs.

Solution:

The hospital recognized that it was essential for participants in the new retirement program to understand the need to contribute at least 6 percent to the 401(k) plan. Findley developed a multiphased approach, so employees would receive information over a three-month period, thus allowing them to digest the messages and want additional information. The phases were:

  • Phase 1 Initial Announcement: Employees received a personalized letter and required 204(h) notice announcing the changes and rationale.
  • Phase 2 – Retirement Program Education: Employees received an informational
    packet that included a brochure (that matched the program in which they would be participating), a DVD of the employee meeting presentation, and a postcard that encouraged participation in the 401(k) plan. Posters, table tents, and CEO blogs promoted the employee meetings.
  • Phase 3 – Personalized Statement: All employees received a personalized statement to help them understand how the change would personally affect them. The statements provided an estimated accrued pension benefit, vesting information, and recent 401(k) account balances. To encourage employees to participate in the 401(k) plan—or to increase their contributions—a bar graph illustrated projections of estimated retirement benefits from PCGH. Each employee also saw estimated savings that assumed 401(k) plan contributions increased by 2 percent.

Results:

The hospital was extremely pleased with the results of the communication campaign. The client said the project was very successful. It was pleased that there was no disruption in the workforce, employees received consistent messages, and only a few employees had questions. The client was also excited to see so many employees enroll in the plan. In fact, one employee who was hired in 1994 and who had never participated in the savings plan decided to join the 401(k) plan. Using the 401(k) data, Findley found that 12.3 percent of employees either increased their contributions or enrolled in the plan.

Category: Findley Proof
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