Empower Institute: lose the jargon
Employees want retirement plan communications to be brief, direct and sent to their personal email accounts
When it comes to financial words and terms, some employees are saying, lose the jargon.
Research from the Empower Institute shows that many employees find frequently used terms in retirement plan communications confusing or vague. Key top line findings include:
- 66 percent of survey respondents don’t understand what “rebalancing investments” means
- 69 percent said they are unclear on the meaning of “asset allocation”
- 88 percent of millennials say they are unclear of the meaning of “defined contribution retirement plan” compared to all survey respondents
- 83 percent of millennials say it is unclear what “social security optimization” means compared to 77 percent of all survey respondents
The research also revealed some good news: even small tweaks can help break down complex ideas and make important financial information understandable to plan participants. The research is laid out in a new white paper from Empower titled “Boosting the Effectiveness of Retirement Plan Communications.”
“As we strive to encourage more Americans to save for retirement, our research shows that many employees find common finance language confusing,” said Empower President Edmund F. Murphy III. “Clarifying the language we use when describing important retirement plan concepts could go a long way to improving employee understanding of retirement.”
Empower conducted three surveys1 spanning 12 months to find out what individuals understand and what they don’t when it comes to financial and retirement-industry jargon.
The paper keys in on jargon. Sometimes industry insiders don’t realize when they are using it. However, jargon contributes to the perception that retirement plan communications are verbose or overwhelming, according to the survey results.
Survey respondents said they want communications to be brief, relatable and personalized.
They also said they prefer communications about their retirement plans in a personal email. Fifty-one percent of survey respondents said personal email is their preferred method of receiving communications.
“Effective communication considers not only how you say something, but where and when the message is received. If you deliver a message to a place where employees aren’t looking, the message won’t matter, no matter how well it’s constructed,” the research concludes.