June 6, 2013
NR 2013-07

For additional information:
Jason Hammersla
office 202-289-6700
cell 202-422-4652 (cell)

Council, J.P. Morgan tell DOL advisory council: simplicity, flexibility more effective than mandates

WASHINGTON, DC — As the ERISA Advisory Council (EAC) considers recommendations to the U.S. Department of Labor (DOL) regarding retirement plan communications to participants, J.P. Morgan's Managing Director, Retirement Plan Services Donn Hess urged the panel "to encourage experimentation in this area, not a mandate of any particular form of segmentation of communications."

Hess relayed JP Morgan's experience on behalf of the American Benefits Council, which has long supported streamlined and straightforward communications to retirement plan participants. The EAC is currently examining what communication efforts and plan design options are most effective in encouraging participants to save for retirement.

Hess and the Council emphasized the need to accommodate different approaches to participant communication, since employers' familiarity with their workforces allow for more tailored and effective messages.

According to J.P. Morgan's research, "the best participant communications are simple; they help participants make logical decisions with regard to their financial savings; and they employ diagnostic techniques that not only target based on employment status, but also on demographics and behavioral patterns," Hess said.

"Communication is a critical tool for navigating changes to the plan, changes in lifestage and changes in employment status," Hess said. His testimony described in detail certain techniques that could be used to improve the efficacy of retirement plan communications.

The EAC has specifically set out to examine communications targeted by such factors as household type, gender and ethnicity, but Hess noted that J.P. Morgan has steered away from incorporating this information overtly.

Along with automatic enrollment and escalation features, which have substantially improved participation and savings rates, the right communications plan can play a powerful role in helping plan participants achieve personal financial security in retirement.

"The most important thing we can do is to encourage experimentation and innovation," Hess said. "Our industry and the needs of the people we serve are ever changing and evolving. It is important that our communication and education practices have the flexibility to change and evolve with them."

Hess' testimony is available on the Council website. Council staff are available to discuss employer plan sponsors' many considerations with regard to the sponsorship or termination of a plan. For more information, please contact Jason Hammersla, Council director of communications, at or by phone at 202-289-6700 (office) or (202) 422-4652 (cell).

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.