How to Create a Multi-Generational Retirement Communications Plan

Much has been made about the challenges employers face in managing millennial workers—and for good reason. But perhaps the greater challenge companies face isn’t just managing millennials but managing them along with both the generations that came before them, Generation X and the baby boomers, as well as Generation Z, the emerging generation now entering the workforce.
 
In some cases, there can be an age span of more than five decades within a company’s workforce. By 2026, the Bureau of Labor Statistics predicts that 63.4 percent of the workforce will be 25 to 54 years old, while nearly 25 percent will be 55 and older.
 
Knowing how to work with employees across such a wide age span has always been challenging for employers, but these challenges have been accentuated by the digital revolution of the last two decades and the resulting variance of communication preferences across age groups.
 
The implications of these workforce communication challenges are especially significant when it comes to helping employees save for retirement and manage their employee benefits. As more organizations shift away from defined benefit plans toward defined contribution plans, employees are shouldering more of the burden in saving for retirement—and employers have a greater responsibility to educate their workers about their options.
 
That is why it is critical for plan sponsors to develop effective strategies for communicating with each workforce demographic about retirement. Here, we identify three principles plan sponsors should keep in mind as they craft a multi-generational communications plan for educating their workforce about saving for retirement using the company’s retirement plan.

Know Your Demographics

People’s financial priorities and needs shift over the course of their lives, so the first step in developing a retirement communications strategy is to understand the makeup of your workforce. There are helpful financial messages that can be sent to each generation; it is a matter of understanding where they are on their financial path.
 
For example, the average student debt for graduates of four-year public colleges in 2017 was about $27,000, according to The College Board, and the number of borrowers with at least $100,000 in student debt has quadrupled over the past decade, according to the Federal Reserve Bank of New York.
 
So, for younger workers, you may want to focus on educating them on ways they can save for retirement while also paying down their debt. Conversely, for older workers, you may want to educate them about the catch-up contributions available for workers age 50 and older.

Avoid a One-Size Fits All Approach

It is also important to think about the communication channels that are likely to resonate with different segments of your workforce. According to a survey by TD Ameritrade, members of Generation Z—those born in 1997 to the present—are more likely to consult their friends (24 percent) and online videos (20 percent) than a financial advisor (11 percent) or their employer (5 percent) when it comes to financial advice.
 
Even within age groups, people have different learning styles. Rather than having just one set of materials with information about your retirement plan, consider using a mix of brochures, email, videos, podcasts, infographics, online calculators and blogs to get the message out.

Look for Year-Round Opportunities

Financial education shouldn’t be a once-a-year event when human resources professionals hand out pamphlets at re-enrollment time and expect employees to understand their choices. Employers should look for opportunities around the year to send and reinforce retirement plan messaging.
 
Employers should consider these regular events during the course of the year to inject appropriate messaging for each generation:

• Bonus time: Remind employees that they can use some or all of their bonus to increase 401(k) contributions

• Annual pay raise: Encourage employees to increase their 401(k) contributions by the same percentage as their pay raise

• Tax Day: April 15 could be an optimal time to remind employees that any refund they received could be put toward retirement and to remind them that contributions to their 401(k) plan can help reduce next year’s tax bill

• Open enrollment: Inform employees about how changes to premiums could affect the amount they have available to contribute to their retirement

BDO Insight: A Customized Approach

We live in a highly automated world where paychecks are automatically deposited and healthcare expenses and other payments are withdrawn without employees pushing a button or writing a check. So, it is no wonder that most employees don’t pay much attention to their retirement plans—until they have to.
 
That is why it is important for employers to be more thoughtful and creative in identifying ways to engage their workers about preparing for retirement. Doing this for workforces that span multiple generations requires understanding your workforce’s demographics and creating messages that are tailored for various segments of your employee base.
 
Managing a multi-generational retirement communications plan can be complicated, but BDO is here to help. Your BDO representative can help you review options and strategies that will best fit your company’s objectives and employees’ needs.