Gillian Kemmerer
Welcome, I'm Gillian Kemmerer, and today we are joined by Rachel Weker, senior retirement strategist in the Retirement Plan Services Division at T. Rowe Price. Rachael, it's such a pleasure to have you here today.
So we see personalization as part of our daily lives from the TV and movie recommendations we get from streaming services to recommendations for online shopping. So how does personalization play a role in workplace retirement plans?
Rachel Weker
So personalization is particularly important to ensure that our education will really resonate to help employees get and stay on a successful savings path. And communications really need to be relevant to where an individual is on their savings journey. So you're not going to give the same message to someone who's just starting out and maybe not even saving enough to get their full company match versus someone who's already achieving those targeted savings goals. So the content itself needs to be relevant and also the way in which we deliver that needs to be as compelling as possible.
And we've got a couple of examples that I think really underscore the value of effective personalized communications to that end. We deliver a series of personalized videos that are teed up throughout a participant’s savings journey, and we find that these participants who consume those video content are twice as likely to increase their savings level. They're four times as likely to move on and consume additional information on our planning site. So a really effective way to both engage the individual but also drive, increase, and improve savings behavior.
Technology also enables us to deliver more culturally relevant content, and that can be really effective in also driving engagement. An example of this is our Spanish portal, which is a microsite that enables our native Spanish-speaking population to consume information before they get to the primary website. And what we find is that people spend a lot of time with that information that is specifically curated for that population spending on average 20 minutes on that site and far more likely that they then go on to the primary website and make changes like improving their savings rate, making your asset allocation change, and that type of thing. So personalization, really important and driving not only engagement, but also improved savings behaviors.
Gillian Kemmerer
And employee populations are of course typically diverse, and often needs vary across generations and participant demographics. So what are some of the implications of this from a workplace retirement plan standpoint, and how can diversity be examined?
Rachel Weker
So there's increased recognition of the financial disparities that exist across an employee population. And as our industry has focused on financial wellness over the last few years, that's really a recognition of the reality that people don't think about retirement separate from all of the other financial priorities and objectives and challenges that they might be dealing with. While retirement is a top financial priority across the board for employees, when we look at data through the lens of race and ethnicity and gender, we see that there are differences in terms of not only financial priorities—people might be saving to build up emergency savings to save for a home—we also see that there are disparate levels of other financial challenges like paying off credit card debt, paying off student debt as an example. So when an employer can understand their employee demographics and their priorities, it will enable them to make sure that the benefits that they provide access to are really going to resonate for their employees. And that's particularly important as employers are really focused on attracting and retaining that diverse employee workforce.
Gillian Kemmerer
Now, if I could put forward a few statistics, the Pew Research Center estimates that 10,000 baby boomers are expected to turn age 65 each day until 2030, and plan sponsors are increasingly aware of this aging workforce and the income needs of millions of baby boomers entering retirement can be transformative.
So in T. Rowe Price’s view, do you consider retirement income a product—something that an investor can purchase—or a service, or somewhere in the realm of both?
Rachel Weker
So effectively addressing retirement income isn't going to be solved with a sole investment solution. And when you think about the complicated and personal decision-making process that an individual goes through as they transition into that drawdown phase of life, it's going to require robust education and planning tools to help them evaluate the different trade-off decisions that they’re going to need to make. As employers are increasingly interested in providing an opportunity for retirees to leave their money in the plan throughout that drawdown phase, they're going to need plan design that's flexible enough to accommodate the needs of their retirees. And as you think about the investment solutions that are going to enable people to achieve their goals, people's needs are different and the picture that they're looking at as they start on retirement is different. So we also don't think that there's one investment solution that's going to meet all needs. So I would say it's a broad ecosystem of solutions that are necessary, and it's going to encompass education, plan design, as well as a suite of investment solutions.
Gillian Kemmerer
OK, Rachel, this was an incredibly comprehensive look. Thank you so much for taking the time to share your expertise with us today.
Rachel Weker
Thank you.
Gillian Kemmerer
And thank you for tuning in. You just heard from Rachel Weker, senior retirement strategist in the Retirement Plan Services Division at T. Rowe Price.
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