While automatic enrollment is sure to have a dramatic increase in benefit-plan participation, research shows that for plan sponsors who havent opted for that feature, simple early communication with employees about a plan is a major key to increasing participation, says CitiStreet, a Quincy, Mass.-based benefits firm.


CitiStreet says a review of its communications over a dozen years showed that while comprehensive plan communication is valuable in the later stages of the education process, too much initial information can lead to inaction and confusion among plan participants.


The fewer decisions employees need to make, the more likely they are to enroll, says Lisa Margeson, CitiStreet senior vice president of education and communications. In fact, weve found that removing investment decision-making up front and defaulting employees into an appropriate fund can improve enrollment rates significantly. Once enrolled, a second tier of communication begins to help participants, if desired, choose other investments that are the most appropriate and effective for their savings goals.


CitiStreet, which made its research brief available to customers, drew upon a review of best practices and results in terms of communication and plan participation. The study included materials from State Street Corp., which created CitiStreet with Citigroup in 2000 in a joint venture that still owns the company.


CitiStreet executives say that firm has improved its communications through focus on a needs-based approach to products and services. That commitment, across all parts of the company, aims to help increase employee participation in plans and help employees make the best decisions about their benefit plans from the earliest days of their employment through retirement.


The research found that simple language and simplified processes have resulted in response rates significantly higher than through traditional, information-rich approaches. In one instance, the response rate doubled when a plan communication piece was simplified from five reasons to participate to just two key points.


The typical person receives more than 30,000 direct mail pieces over 30 years, says Margeson. Its no wonder that retirement-plan communications often get put aside or simply ignored. Sponsors and providers need to cut through this clutter with their communications to maximize participation and help employees achieve their retirement goals.


CitiStreet employs 3,000 people. It has offices throughout the U.S. and also in Australia.


It says it serves more than 12 million participants and administers $233 billion in assets for defined-contribution, defined-benefit, and health and welfare plans of corporate, government, health-care, nonprofit, and other organizations.