Retirement Change Communication
A phased communication strategy when implementing a new retirement program allowed this hospital to engage employees and attract and retain talent.
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 has placed an emphasis on providing employees with competitive benefits. The hospital has always been proud of its retirement program, which included both a traditional defined benefit pension plan and a 401(k) savings plan. They recognized, however, that their 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. Plus, they could not avoid addressing pension costs.
With the support of Findley Davies, the hospital created a Retirement Program that minimized the impact to employees. Some employees remained in the current retirement program, while others moved to a newly formulated plan that gave employees more flexibility and reduced employer costs.
The hospital recognized it was essential for participants in the New Retirement Program to understand they needed to contribute at least 6% to the 401(k) plan. Findley Davies developed a multiphase approach so employees would receive information over a three-month period - allowing them to digest the messages and crave additional information. The phases were:
Phase 1 – Initial Announcement. Employees received a personalized letter and required 204(h) notice that announced the changes and explained the 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. Also, posters, table tents, and several CEO blogs promoted the employee meetings.
Phase 3 – Personalized Statement. All employees received a personalized statement to help them understand how they would be personally impacted by the change. It featured 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 - projections of estimated retirement benefits from PCGH were shown in a bar graph format. Each employee also saw estimates if they increased contributions by 2% to the 401(k) plan.
The hospital was extremely pleased with the results of the communication campaign. The client said the project was very successful - that there was no disruption in the workforce, employees received consistent messages, and there were only a few employees with questions. They were also excited to see so many employees enroll in the plan. In fact, one employee who was hired in 1994 and never participated in the savings plan, finally joined the 401(k) plan. Using the 401(k) data, Findley Davies found that 12.3% of employees either increased their contributions or enrolled in the plan.