Earlier this year, Financial Services Regulatory Authority of Ontario (FSRA) published a guide for employers titled "Communicating the value of your pension plan". It is aimed for employers and plan administrators to better communicate the full value of pension benefits offered. For the record, FSRA recognizes that the suggested measures in the guide go above minimum requirements of the Pension Benefits Act and describes FSRA’s views without creating new compliance obligations.
In a competitive marketplace, companies push to gain an advantage in attracting and retaining talent. Providing retirement benefits and clear communication can be one way to do this. This concept applies equally to plan administrators, where they can differentiate themselves through member engagement, especially considering the widespread adoption of other well-established administrative features.
In a notably progressive move, FSRA is leading the way in this initiative. Let's delve into some key points from FSRA's guide regarding the effective communication of a pension plan's genuine value.
Value of a plan
A pension plan can constitute a significant component of an employee's overall compensation or total rewards package, potentially representing tens of thousands of dollars annually. Nevertheless, pension plans are not as comprehensively understood as, for instance, health benefits.
For this reason, benefits are not fully utilized and money is left on the table by:
Key communication elements
Some of the recommendations for better communication include:
Last, but not least, digital communications plays a key role in this endeavor. Plan sponsors and administrators start out with transitioning from paper-based communications to digital channels, such as websites, email, social media platforms as well as internal communications channels at the workplace. Social media can encourage users to share ideas and thoughts in the form of texts, blogs, videos and infographics. Digital channels are cost-effective communication tools with the potential to reach large audiences given the majority of the workforce have electronic hand-held devices like smartphones or tablets.
We support this comprehensive guide and the tools it highlights for effectively communicating the full value of employer-provided pension benefits. One valuable addition we'd like to suggest, a specialty of ours at Pensionbar, is the integration of interactive simulators. Our custom simulators are woven into unique user journeys that reflect different life stages. This approach empowers members to learn through interactive experiences and improves financial literacy of employees. The complex plan parameters, governed by rules and regulations, are hidden within the calculation engine. This allows users to generate personalized results in real-time without needing to navigate the plan's intricacies.
Having a regulator that not only supports innovation but also provides valuable and unbiased guidance is a privilege that Ontarians should not take for granted. We certainly don’t!
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