Episode 12 : 11/09/2016

Re-enrollment: Framing the discussion for success

Jeffrey M. Gratton, C(K)P®

Managing Director & Chief Marketing Officer
SageView Advisory Group


Ben D. Jones
Managing Director – Intermediary Distribution
BMO Global Asset Management

Matt Smith
Managing Director
BMO Global Asset Management

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Today, we discuss the topic of re-enrollment for corporate retirement plans. Our guest is Jeff Gratton of SageView Advisory Group, a certified 401(k) professional and one of the most influential retirement plan advisors in the country. There has been a significant body of research over the last decade about the benefits of re-enrollment for plan sponsors and their participants, yet many sponsors remain hesitant to implement automatic re-enrollment. In this episode, we address some of the hesitations that sponsors have towards this feature and identify some successful ways advisors can help committees work through their decision.

In this episode:

  • What re-enrollment really means
  • Why plan sponsors don’t pull the trigger on re-enrollment and what holds them back
  • Why simple and clear communication makes the difference
  • The concerns that plan sponsors have and how to refute them
  • What demographics see the most benefits from re-enrollment

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Jeff Gratton – For me personally, and for the committee, in what I try to really get them to focus on, is though they may never get credit for it, they are changing people’s lives, in that this 25-year-old would have never gotten in the plan.  And that gives the committee a lot of satisfaction.  It really shifts the conversations about planned governance and expense ratios and all of the things that are of course extremely important to make sure they’re in good order, but it’s not nearly as important as getting people to participate in the plan and save enough.

Ben Jones – Welcome to Better conversations. Better outcomes. presented by BMO Global Asset Management.  I’m Ben Jones.

Matt Smith – And I’m Matt Smith.  In each episode we’ll explore topics relative to today’s trusted advisors.  Interviewing experts and investigating the world of wealth advising from every angle.  We’ll also provide actionable ideas designed to improve outcomes for advisors and their clients.

Ben Jones – To learn more, visit us at bmogam.com/betterconversations. Thanks for joining us.

Disclosure – The views expressed here are those of the participants and not those of BMO Global Asset Management, its affiliates, or subsidiaries.

Matt Smith – Today we’re discussing the topic of re-enrollment for corporate retirement plans.  There’s been a significant body of research over the last decade about the benefits of re-enrollment for planned sponsors and their participants.  Still many sponsors remain hesitant to implement automatic enrollment.  We’ll be discussing some of the hesitations that sponsors have towards this feature as well as some successful ways to help committees work through their decision.

Ben Jones – First let’s get a baseline understanding of what we mean when we say re-enrollment.  It’s not the same as auto-enrollment where a company automatically enrolls new employees into a retirement plan and defers a certain percentage of their salary into a qualified default investment alternative, or QDIA.  With re-enrollment all eligible participants, whether they are participating in the plan or not are enrolled or re-enrolled into the retirement plan and QDIA.  Unless that participant opts out of the re-enrollment process.  This could help your tenured employees get into the plan that may have started prior to implementing an automatic enrollment feature, or existing employees stay on track for retirement by re-enrolling them into more age appropriate allocations from elections that they may have made years or even a decade prior.  Introducing re-enrollment has its challenges and can be met with skepticism from planned sponsors.

Matt Smith – To help make sense of all of this, Ben sat down with an expert in re-enrollment.

Jeff Gratton – My name is Jeff Gratton.  I am the chief marketing officer and managing director of SageView Advisory Group.  I have a duel role at SageView; about 85% of my time is spent on the front lines helping planned sponsors manage their retirement benefits more effectively.  The other role that I play at SageView is chief marketing officer, which basically means that I’m speaking at different conferences around the country.  I’m helping understand where the industry is heading.  And then also internally at SageView, leading different strategic direction that might be implementing a participant advice solution, working on a large CRM project, and just basic direction of the company.

Ben Jones – And where are we recording this today.

Jeff Gratton – We are in the great state of Minnesota in Minneapolis.

Matt Smith – Jeff was named one of the top 50 advisors under 40 by NAPA in 2015.  He’s a certified 401k professional and has been named as one of the most influential retirement planned advisors in the company by 401k Wire.  He’s also been named one of the most successful retirement planned advisors in the company by PlanAdvisor magazine.  So he’s the perfect guest for this topic.

Ben Jones – Your resume speaks for itself.  You’re definitely thought of as a thought leader in the industry.  But when people ask you at a cocktail party, how do you describe what it is that you do for clients.

Jeff Gratton – A question I get often.  And I simply state that I help companies manage their retirement benefit more effectively.  That encompasses helping participants save.  I’ll often mention that the passion that I have is the average person on the manufacturing line, giving them simple ways to save a little bit out of their paycheck so they can retire with dignity someday.

Ben Jones – What is it that really brought you into the retirement plan business?

Jeff Gratton – Well in the beginning of my career, I worked for a regional bank.  Set up a desk inside of a bank branch, was helping people with general financial questions, opening up small IRAs, helping them with some college funding, 529.  And I do remember a gentleman that walked in, he had a small company and I set up a SIMPLE plan for him.  And from there I just went out, did some employee education meetings, helped with the plan design, didn’t know a lot about what I was getting myself into.  But two things I loved about it was that I was sitting in front of a lot of people, helping them put $25, $50, $100 a month away into their paychecks, and educating them on the power of what that would look like in 20, 30, 40 years.  And also just the re-occurring part.  At that time in the business, a lot of things were commission and these up-front commissions where what was the incentive to keep servicing clients.  And I thought as I — building a business — the retirement plan business made sense.  There was monthly deposits going in, and I would stay in touch with the plan sponsors and the participants ongoing.  It just felt like a better business model for me ongoing.

Ben Jones – And on that job, did you seek that job out at a regional bank, or did you just fall into it?

Jeff Gratton – Just fell into it, it was an on-campus interview.  And really just basically fell into it.  I had some family connections to that particular bank.  And I think just in my network that’s how it all unfolded.

Ben Jones – I’ve had the opportunity to get to know a lot of the folks at SageView over the last decade and really build some personal and professional relationships with many of your colleagues.  Could you tell our audience a little bit about SageView?

Jeff Gratton – Yeah, SageView is a national RIA, registered investment advisor.  We have 22 offices across the country; it’s hard to believe when I first started in January of 2008, I think we had maybe four or five.  But we’re headquartered in Irvine, California.  Currently we manage approximately $60B in retirement plan assets.  About 95% of our revenue is generated strictly from retirement planning consulting services.  We also have an actuarial practice.  We have a non-qualified deferred compensation practice as well.  But at the end of the day, our core focus is helping planned sponsors and participants with their retirement benefit.

Ben Jones – And what do you think you would attribute kind of — I mean you guys have seen tremendous growth, what do you think you’d attribute that to?

Jeff Gratton – I think timing is a big part of it.  I just think what our focus was and how the industry changed.  And we were just at the right place at the right time.  And from the beginning we have always been a fiduciary to our clients.  And that, thought today, may be pretty standard for organizations like ours, however, at the time when we first started, it wasn’t.  And that was a differentiator at the time.  I still think today with the landscape and all of the new regulations coming out by us being a fiduciary and doing business the way we have, positioned us well for the future.  But I think that’s a part of it.

Ben Jones – Since the Pension Protection Act is 2006 was passed into law, the autos, auto enrollment, auto escalation, and auto investment, via QDIA have become the way of the land.  They’ve had strong adoption across the board.  However, when implementing an automatic enrollment strategy, many sponsors started on a go-forward basis.  This means they missed the opportunity to improve outcomes for their entire participant population by doing a complete re-enrollment.  Jeff breaks down why re-enrollment is so hard and some practices that he’s learned over the years to lead planned sponsors to the right decision.

Jeff Gratton – Well this is something that I’m extremely passionate about, and not an easy discussion to have with some planned sponsors.  I think it’s starting with defining what we mean by re-enrollment.  I think to break it down and to be simple, there’s investment re-enrollment, but there’s also the salary deferral re-enrollment.  And maybe, you mentioned the complete re-enrollment.  And so it’s really separating those two and defining that to the planned sponsor because a lot of times they don’t really necessarily understand what you mean by re-enrollment.  So educating them on what it is.  The next part is, it’s just reading their body language.  And it always happens when I’m in front of a committee, everyone immediately becomes uncomfortable with taking control of what they feel, and rightly so, is their employees money.  These employees have made a decision, they think, to not participate in the plan, or they’ve made a decision to invest their money a certain way.  And the reality is those participants, if you ask them, didn’t know what they were doing when they made that decision.  Not all, but most.  And even the ones that did make that decision either not to participate or how to invest, they didn’t feel comfortable with it.  Just taking that paternalistic barrier down and giving them the confidence that what they’re going to be doing, if they decide to move forward with re-enrollment, that the participant reaction is going to be very positive and not negative.  I’m not going to say that there are going to be some people that question why.  And frankly, the committee knows who those people know before the process even starts.

Ben Jones – I bet they do.

Jeff Gratton – And the vast majority they see after the results that I’m sure we’re going to talk about in a moment, they get more comfortable pretty quickly.

Ben Jones – You know the DOL has provided a safe harbor for re-enrollment.  And this by itself hasn’t been enough to kind of bring planned sponsors down this path.  I’m getting the impression that a lot of it is this philosophy discussion around paternalism.  Or do you think that people just maybe misunderstand the safe harbor opportunities?

Jeff Gratton – I think when they understand the protection that they get when you re-enroll into a qualified default investment alternative, a QDIA, and you explain it to them, that gets them over the hump.  And this is a Jeff Gratton opinion.  I believe that there is less risk by — and it mitigates risk overall for the plan by conducting a re-enrollment into a QDIA.

Ben Jones – Really recently JPMorgan published a study and they had found that about 30% of planned sponsors had considered kind of doing a complete re-enrollment.  And they had not pulled the trigger.  I think you kind of led to some of this paternalism, or hurdles on paternalism.  Do you believe there’s any other kind of leading concerns that sponsors are dealing with?

Jeff Gratton – You have to put yourself in the position of this committee.  And typically it’s a CFO, a total rewards, a head of HR, controller.  They feel like they don’t want to be bold, it’s the status quo.  And you have to show them that these auto features work, and I’ll give you an example of that.  We did a re-enrollment recently.  And what I did with some data mining on showing them exactly how auto features work.  And to give you a few stats, there were about 134 eligible participants not participating in the plan.  The interesting number here is 101 of them were hired prior to 2012, and on January 1st, 2012, auto enrollment for new employees was implemented.

Ben Jones – Well that tells a story.

Jeff Gratton – Yeah, but the great stat there is that on those that were auto enrolled, 90.2% were participating in the plan at 7%.  So the point here — and also there were 106 defer in between 1% and 5%, and the match is at 6.  So I know I just threw out a lot of numbers, but the bottom line is since they implemented auto enrollment, all new hires were participating at a very high level and deferring high levels.  They left behind all their tenured employees that didn’t experience the auto enrollment.  So my suggestion and recommendation was them to go back and do a back sweep and re-enroll all of them.  And the results have been astounding.  Participation went from 82% up, and it’s been three months, and they’re up to 98%.  I feel like that 98% participation might come down after they finally realize maybe money is coming out of their paycheck, but those stats are astonishing.  We did both a re-enrollment for salary deferrals, and participation, and also investments.  We did re-enroll everyone into a target date fund.

Ben Jones – Fantastic.

Jeff Gratton – Yeah, it was a great case and a good exercise.  And the planned sponsor hesitant in the beginning realized that well if it’s working for our new employees, we need to do the same thing for our more tenured employees.

Matt Smith – Jeff authored an article titled “When The Dollars And Cents Make Sense” that reads as a case study of a retirement plan committee going through their decision.  And the article addresses the concerns a committee had about implementing re-enrollment.  Jeff outlines the three main concerns that committees have.  And if you’d like further reading on this topic, you can find the link to his article in the show notes of this episode at bmogam.com/betterconversations.  The three concerns Jeff identifies are mediocre participation, increased plan costs and the fear of being too paternalistic.

Ben Jones – The first one is participation rates weren’t where they wanted.  They weren’t necessarily bad, but they wanted to improve participation rates.  One other concern, and I’ve learned my lesson on this Ben, with opening my mouth about how great re-enrollment is and a CFO after the meeting told me, well Jeff you just cost me $1.4M.  So making sure you understand the impact to the company prior to going in, and understand the financial strength of the company is very important.

Ben Jones – Especially in the environment we’ve been over the last several years.

Jeff Gratton – So you just want to have the conversation maybe with the financial side of the house before maybe going all in inside of a committee meeting.  That did happen to me once and, again, I did learn a lesson.  But most of the companies when we talk about the match portion, their budget has always included if everyone was contributing the maximum amount, this is what their outlay would be.  Not all, but most.  So I’ve been pleasantly surprised that most of my clients have wanted people to take full advantage of the match and the extra cost wasn’t a huge barrier.  They did want to look at different projections, different plan designs, what-if scenarios that we provided them.  The cost wasn’t always a huge factor, but certainly a consideration.  And then the last concern was something we mentioned a couple of times was this too paternalistic, too big brother, were they over-stepping their bounds.  I often use a term that maybe a lot of you have heard from the book “Nudge”, and it’s a great book if you haven’t read it.  It talks about choice architecture, helping people make better decisions.  And the term they often use is the paternalistic libertarian approach.  And basically what that means is we’re going to do it for you and we’re going to do it what we think is in your best interest, but we’re going to make it extremely simple for you to opt out.  And I think if there’s one big takeaway from this podcast and when you’re talking about re-enrollment, it’s simple communication to participants about what is happening and why.  And if they don’t want to participate in this re-enrollment, make it very easy for them to opt out.  It is a check the box situation where it just makes it easy for them.

Ben Jones – I think making the right decision, the easy decision, and then giving them the opportunity to make a different one really kind of helps to frame what it is that re-enrollment really does. I want to dive into each of these three components that you laid out, or three concerns.  Mediocre participation, why it that sponsors, I think for is years and years have focused on their participation rate.  Why is that the case, why do they care so much about participation rates?  And I often see them get really competitive when they see a benchmark that’s higher than what they’re at.  Tell me a little bit about their thoughts.

Jeff Gratton – Well I think you want to frame the discussion around what participation rates do for the final outcome.  So we often look at what the replacement income ratio is of a plan for the participants.  And these are general numbers.  But for example, if we look at a current plan and all the participants are on average going to replace 62% of their income that includes Social Security.  What if everyone in the plan and the average went from four to eight?  Of course the replacement income ratio goes through the roof.  So I think it’s framing that discussion around participation, not only in participating and starting early, but it’s getting those deferrals rates up.  So I think it’s jist making sure they understand the end goal is replacing income.  I mean that’s the whole point of the retirement plan.

Ben Jones – I couldn’t agree more.  And it’s often that a lot of the employees that I’ve talked to over the years, they want to participate in the plan.  They actually just have anxiety about participating itself because there’s a lot of decisions that go into that that they don’t understand.  So this kind of takes a lot of that stress off their plate.

Jeff Gratton – Agreed.

Ben Jones – The results of the case study that you lay out in “Dollars and Cents” are staggering.  Maybe you can share some of the other stats you’ve brought because you’ve had success with multiple clients and I think the ability to improve people’s lives.  I mean you’ve had a tremendous impact in making this happen.  Share some of these stats with our audience so that they can see some of the impacts they can have.

Jeff Gratton – Sure, I think the example I gave earlier with the auto enrollment and back sweeping people that were never auto enrolled longer tenure employees was very powerful and something that I just found really by accident going through all the data.  But another one that we did was for a 4,000 person energy company.  There were 425 employees were re-enrolled.  And these employees were contributing between zero, not contributing, and 5%.  Just these numbers are unbelievable.  83% of those 425 employees.  And by the way this employer already had an 87% participation rate.  So I think the listeners will find that interesting.  Well, why do something this big on a re-enrollment if you already have an 87% participation, but they wanted 100.  They knew people were being left behind.  So 83% of the participants took some sort of positive action.  205 more employees are now contributing to the plan, and 107 employees increased their deferral rates.  Plan participation rate when from 88% to 98%.  It’s been a year and a half and that 98% has gone down to 96%.  So we did see a little bit of fall off.  Of those deferring, only 55 participants are not receiving — this is almost 4,000 people — only 55 participants that are deferring into the plan, are not receiving the full company match, which is down from 200 before the re-enrollment.

Ben Jones – 55 out of 4,000.

Jeff Gratton – And, now remember, there is — the participation is 96.  But of those — so you have a 96 participation today, and of those only 55 are not contributing to receive the full match.  And prior to the re-enrollment it was approximately 200.  So those are some life changing stats.  And here’s the kicker.  With this particular plan, which I’m sure your listeners are going to really take notice of this stat is they re-enroll every year.

Ben Jones – And that’s actually interesting that you brought that up, because that was my next question.  You mentioned some of the attrition of employees over time.  You go in and you initially have 98%, falls after a year and a half to 96%.  I think that’s a fairly similar experience that I’ve seen with plans.  Do you think that plans should be considering some sort of re-enrollment cycle like every two, three, five years, and you mention this to clients every year?  What are your thoughts on that?

Jeff Gratton – I was — when we were going through this analysis with this particular client and the committee decided to go ahead and just do it every year, I was shocked.  I would have thought that every three to four years doing a re-enrollment — and I’m talking about a salary re-enrollment would be — this particular client just does the salary deferral re-enrollment, not an investment re-enrollment.  That is the appropriate timeframe, three to five years of doing the salary deferral re-enrollment.  But again, it was shocking.  I think they have a very robust open enrollment period and some great technology to help people make decisions about all their benefits and they thought this would just be something easy to put into that annual open enrollment process.

Ben Jones – The second concern laid out in Jeff’s article is the potential for increased costs if there’s increased plan participation.  We discussed why costs are a concern and Jeff lays out some insight for advisers to help sponsors see ways to stretch or improve their match.

Jeff Gratton – A term often used in the industry over the past several years have been stretching the match.  If we look at an average match, would be 50% up to 6%.  6% we know is not going to be enough to save for most people.  They need to increase that deferral over time.  If we look at keeping the employer cost the same, if it was moving to — to keep it simple — 25% up to 12%, again, by trial and error I’ve learned that a situation like that probably the audience is thinking, well, Jeff, that really hurts some people that aren’t going to be able to take full advantage to the match because they can’t contribute 12%.  There’s a tipping point in there.  What we found is it’s somewhere around the eight-ish, 8% – 9% where that seems to make sense when you’re structuring a match formula.  Again, the results speak for themselves when you increase what people have to contribute to get the full match = they get there.  The talking heads on any cable, financial show, always will say well contribute what the match is of the company.  So I think the company has a responsibility to set that match so people do save enough and when — in the Pension Protection Act in 2006 came out, the worst mistake they made was mentioning and gave some guidance around this 3% for an auto-enrollment percentage.  That was — sometimes it’s mistakenly perceived that that’s the number that is some sort of safe harbor and that’s what people should use, and clearly that’s not.  And I think the guides have come out subsequently to make sure people know that that’s not the case.  We as an industry and plan sponsors need to set these default rates higher and get people to contribute more.

In the example that you gave, the 25% to 12% is exactly the same as 50% to 6%.  However, if they auto-enroll and now 50% of their population is in the plan that wasn’t there, this has a significant impact on the bottom line.  How do you go through that conversation, which is, I have to imagine in these tighter times, a difficult one.  How do you go through that conversation for plans that haven’t budgeted maybe the full amount?

Jeff Gratton – At the end of the day, the cost is the cost and the CFO is often times looking quarter to quarter.  What I try to show and we have some tools at SageView that allow us to do this, is the impact that older workers have on the bottom line if they can’t retire.  Please don’t think that older workers don’t add value to a corporation, because they absolutely do.  But when you have people that want to retire but they can’t, at the end of the day that hurts the bottom line.  So we’ve developed some ways to show why it’s so important to help people save more and build up their retirement balances so they can retire when they want to.  And of course mostly for health insurance reasons, absenteeism and things like that; health concerns helps significantly with the bottom line of the company.

Ben Jones – That’s a great way to frame it.  For sponsors who haven’t planned appropriately, can you also model out different matches for the auto-enrollment to help keep their budget maybe what it is but with more participants?

Jeff Gratton – Absolutely.  As we alluded to previously, I think just thinking — getting creative and not just stopping at what a typical match is.  Let’s look at some ways to re-structure the design to where it possibly wouldn’t cost anything more to them.  But I think, Ben, the important part to — if they’re devoted to helping employees save, a lot of times that’s just going to be more cost.  And if they don’t want to have more cost, I think the other features auto-escalation is another one that we didn’t mention inside of here, just automatically increasing by 1% each year.  Again, it’s shocking the numbers over a four or five-year period what the average deferral rate goes to when you just simply auto-increase everybody.

Ben Jones – I think auto-increase is the often not talked about but very powerful tools that sponsors and plan advisors have in their quiver to help participants reach their goals.  The first two, mediocre participation and the match budget, those are number conversations.  And like you mentioned, they’re pretty straightforward.  The numbers are the numbers and they seem like more straightforward conversations with an investment committee and the decision makers.  The third concern that you lay out, this concern about being too paternalistic or telling employees what to do with their money is another more simplified way to say it, that’s a philosophical discussion.  Tell me about some of the ways that you’ve had success approaching that conversation.

Ben Jones – You know, I think it’s simply being bold with your recommendations and not being scared to go out on a limb and tell a committee exactly where you stand and show hard data on how it works and show case studies with other clients that you’ve worked with on how it’s worked.  One example was I was having a tough time getting the committee to really pull the trigger.  They loved it but they just could never — they could never get there.  We had a lunch with a client that we did implement this with and they hit it off.  The client that had their concerns that moved forward with it told the client that wasn’t moving forward that this is something that you should really consider and it wasn’t as bad as we all thought it was going to be, and the negative feedback was minimal.  That got them over the fence.

Ben Jones – That’s a really great.  I just want to pause there because I think that’s a really powerful way to let them talk to a peer that’s in your book of business, and the concerns may have been the same, but as a best practice I think that’s a really great best practice to let them talk to some of your other clients who have done it, and they’re own experience.

Jeff Gratton – That was a great example, but I can tell you that there have been times when we’ve made those bold recommendations and the next committee comes by and I throw some facts out and they say it’s just not something we’re interested in and I keep pushing on it, and there needs to be a time when you understand that it’s just not going to be a fit for the organization and just back off a little bit.  I think there’s a balance in there.

Ben Jones – And so, when that isn’t a fit, is it generally culturally that it’s not a fit, or tell me what kind of drives some of that thought process.

Jeff Gratton – You know, where I’ve had the most difficult times is with plans that have very bad participation.  Call it 40%, 50% participation in the plan.  And then of course the first thing that comes to my mind let’s really push auto-enrollment.  We can get this done.  It’s those organizations I’ve had a tougher time with.  It’s the organizations that have average or above average participation rates and deferral rates that have actually implemented auto-enrollment and auto-escalation.  The re-enrollment strategies that we’ve discussed.  I think it’s simply because they view the retirement benefit as something very important for their employees and the clients that do have lower participation rates feel like no matter what they do with the plan, the employees don’t look at it as a benefit.  It’s unfortunate; I wish the view was different, but just some times for whatever reason, you’re right.  Culture.

Ben Jones – How do you know that you’ve pushed to the point where you need to just drop it?   Like, how does that feel like?  Does it start to get awkward?

Jeff Gratton – Yeah.  It’s a gut.  I think you see an eye roll or you see someone tense up.  I think most of the listeners can just watch for that when you know you’re pushing a little bit hard.  It’s just body language and looking around.  We often — when we meet with a plan committee, I often have a couple other team members, an investment analysis and a relationship manager in the room, and they focus on some body language too, so taking some advice from your team members is always a good thing as well.

Ben Jones – Do they kick you under the table?

Jeff Gratton – Exactly.

Matt Smith – Jeff has discussed the three concerns that plan sponsors may have and shared some of his experience and tips for addressing these concerns.  I thought his advice about knowing when re-enrollment is not a fit was very pragmatic.  If you want more information, check out the SageView article in the show notes of this episode.  Ben ended his conversation with Jeff by talking about who was most impacted by re-enrollment, and some key points for advisors to keep in mind.

Jeff Gratton – My dad always used to say that everyone can make a simple subject complicated, but it takes a genius to make a complicated subject simple.  And so that’s my philosophy and when I take this data it is a lot.  When we pull information from the record keeper there’s all kinds of different things that we need to look at.  But if we can really dive in and present simply and some of these re-enrollments this is a one-page PowerPoint with bullet points that they’re making these big decisions off of.  This isn’t pages and pages of data.  We can simply lay out some of this information in a way that helps them make an informed decision.

Ben Jones – Elegant simplicity is the way to good decisions.

Jeff Gratton – And I think it’s about the trust that you’re developing with the client over time.  I would say often we don’t come on a new engagement and present these types of recommendations off the bat.  We earn their trust over time.  We do some good work with them in other areas of the retirement benefit before we really go after some of these major changes.

Ben Jones – You’ve had a number or successes with re-enrollment with your clients and I think a lot of our listeners have had probably a lot of these conversations and maybe shared some of your same experiences.  But in the outcomes that you’ve been able to see, are there any demographics that you see that has benefited the most from re-enrollment?

Jeff Gratton – Hands down younger.  The under 40 or under 35 employees of companies.  Fortunately, time is on their side.  For older employees obviously not such much.  They’ve benefited greatly from this now.  Where older employees have benefited significantly with re-enrollment is on the investment side, in that they haven’t made a change in their allocation and they’re too aggressive, and now they’re in a more appropriate allocation based off of their age.  Certainly, we all know the benefits of better allocation, especially for someone near retirement.  But I think the younger employees have benefited more just simply because of their savings rates increasing.

Ben Jones – If you can kind of put a warning label on your opinions and advice today, what would that say?

Jeff Gratton – To know your client, know your data, get a coach on the inside, making sure that what you’re going to be presenting will go over well.  And customize the approach based off of the data for that specific client.  You just can’t use general success stories or general stats on why this works.  You need to dive in and give specifics about if we do this; this is the difference it makes to your company.

Ben Jones – Know your client, know the data and provide specifics about their situation.  Don’t use generic examples.  Finally, as we heard in our last episode with Carl Richards, and again here from Jeff, elegantly simplify the concepts and data for your client discussions.  This advice will get your far down the path of re-enrollment conversations with your clients.  Jeff Gratton and SageView are very active in the industry and on their digital and social media platforms.  For links on how to follow them, check out our show notes.  They can be found at bmogam.com/betterconversations.  You can let Jeff know what you thought of today’s episode and continue the conversation with him.

Matt Smith – And continue the conversation by e-mailing us at betterconversations@bmo.com.  Let us know the topics you’d like covered on this podcast in the future.  Thanks to Jeff Gratton for his time and expertise on this topic.  Our production team at BMO includes Pat Bordak, Gayle Gibson, and Matt Perry.  And thanks to the team at Freedom Podcasting.

Ben Jones – Thanks for listening to Better conversations. Better outcomes. This podcast is presented by BMO Global Asset Management.  To learn more about what BMO can do for you, go to BMOgam.com/betterconversations.

Matt Smith – We hope you found something of value in today’s episode.  And if you did, we encourage you to subscribe to the show and leave us a rating and review on iTunes.  And of course the greatest compliment of all is if you tell your friends and coworkers to tune in.  Until next time, I’m Matt Smith.

Ben Jones – And I’m Ben Jones.  From all of us at BMO Global Asset Management, hoping you have a productive and wonderful week.

Disclosure – The views expressed here are those of the participants and not those of BMO Global Asset Management, its affiliates, or subsidiaries.  This is not intended to serve as a complete analysis of every material fact regarding any company, industry, or security.  This presentation may contain forward-looking statements.  Investors are cautioned not to place undue reliance on such statements, actual results could vary.  This presentation is for general information purposes only and does not constitute investment advice and is not intended as an endorsement of any specific investment product or service.  Individual investors should consult with an investment professional about their personal situation.  Past performance is not indicative of future results.  BMO Asset Management Corp is the investment advisor to the BMO funds.  BMO Investment Distributors LLC is the distributor.  Member FINRA SIPC.  BMO Asset Management Corp and BMO Investment Distributors are affiliated companies.  Further information can be found at www.bmo.com.

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