Redefining employee education through peer to peer interaction. With billions spent trying to educate participants in defined contribution (DC) plans like 401ks and 403bs with little if anything to show for it, it’s time to step back and try to understand how adults learn. Not only do adults learn more through interaction, they don’t trust experts feeling more comfortable with peers which is why so many people are now relying on social media to get their news. So why not try that for employee education in DC plans? A plan sponsor attending a TPSU program held at the University of Georgia explains how she has created a “Plan Advocate” program leveraging leaders to carry the message.
The administrator of a multiple employer plan (MEP) with 6,000 employees from members of an association identifies leaders within the various companies to be Plan Advocates. These people are not necessarily senior managers – they are the key influencers within the ranks and they receive training and tools to spread the message. Not providing investment advice, they answer simple questions about where the money goes and what vesting means also using personal experiences. A walking talking FAQ.
Results are measured in better engagement and participation at meetings as well as increased deferral rates. The Advocates enjoy doing it so it’s not hard to enlist them. What would be hard is for the plan administrator to carry this message to as many employees as the Plan Advocates meet with especially in multiple locations.
The curse of knowledge is a cognitive bias that occurs when an individual, communicating with other individuals, unknowingly assumes that the others have the background to understand – rampant in DC education. Experts get up in larger groups explaining difficult concepts that seem simple to them where people are too intimidated to ask questions. Though a fiduciary hedge, current employee education methods are not an effective learning technique for adults. Why not leverage untapped and relatively cheap resources listing leaders within the company to spread the word?
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