Defined contribution plan sponsors are proving the simplest employee communications often are the most effective.
Certainly some high-tech methods are used, including satellite delivery of employee investment seminars to multiple locations or interactive video kiosks in employee lunchrooms.
But many creative employee benefits staffers are using more basic approaches. Among them:
Employee benefit staffers at Southwest Airlines Co., Dallas, visit each employee at every work site at least once a year.
Cosmair Inc., New York, sent seven "tickler" postcards before introducing its new bundled 401(k) plan earlier this year.
Construction Specialties Inc., Cranford, N.J., uses fluorescent lime green paper stock for every essential 401(k) plan memo to participants.
Eljer Industries Inc., Dallas, has Spanish translators at its employee meetings. It also installed private phones in its 10 U.S. plants so plan participants can use the voice-response system.
Drugstore retailer RiteAid Corp., Camp Hill, Pa., set up 401(k) information booths at the company's annual vendor trade show. The purpose: to capture the attention of RiteAid store managers, who can be influential in promoting the plan to employees at their stores.
At Larson and Darby Inc., Rockford, Ill., employees of the architectural and engineering firm are used to attending luncheon workshops on technical subjects. So, the company uses "lunch and learn" meetings to promote its year-old 401(k) plan.
Human resource staffers at Lantech Inc., Louisville, Ky., arrange face-to-face employee sessions to calculate savings projections and asset allocations.
KPIX Television, San Francisco, hosts investment education seminars exclusively for women employees because women were staying away from its regular group sessions.
Southwest's employee population is diverse. Although there are pilots with sophisticated investment knowledge, the airline also employs one person who, when asked to join the 401(k), said:
"I'm so out of shape, I don't think I could make it through the first mile."
To accommodate the diversity, the individual meetings are held.
"Our staff goes out to every location at least once a year, sets up a table in the employee break area and grabs everyone as they walk by to talk to them about the 401(k) plan," said Libby Sartain, director of benefits and compensation.
But as employment has swelled, such personalized service has become more difficult. So, a new centralized benefits center and internally managed voice-response system will be installed in 1995.
The airline is sending letters to about 5,000 union employees who now are entitled to a company match. Each will be sent a personalized letter that shows projected savings for retirement. Because the letter is being sent during December, every letter will include a candy cane "because plan participation with an employer contribution is like a gift to employees," said Ms. Sartain.
Southwest Airlines also is exploring ways to send retirement plan information over the computer on-line network pilots use at home to check their flight schedules.
Southwest has $500 million in 401(k), profit-sharing and employee stock purchase plans.
Cosmair executives have found shorter is better.
"We hardly ever send anything much longer than half a page. You can figure that a plan participant is willing to spend one minute, maybe two, reading a benefits memo. Any longer, and you've lost their attention," said Tony Spadora, director of employee benefits.
Cosmair is a wholly owned subsidiary of L'Oreal S.A., a French company.
Earlier this year, Cosmair moved to a bundled approach for its $70 million 401(k) plan, using the MasterWorks program from Wells Fargo Bank, San Francisco. As is typical at most companies, the new plan was introduced in a series of employee meetings.
But one of the most successful plan advertisements was the postcard series.
"This was a really simple campaign, not expensive or hard to do," said Mr. Spadora. "But it caught everyone's attention, was short and sharp, and helped us raise the visibility of the plan. Ultimately, plan participation improved to 85% from 75% once the new plan was implemented."
Mary Jane Owens, plan administrator, uses a special sticker to identify essential documents for participants in the firm's $16 million 401(k) plan.
"This helps with the intimidation factor. We have to send a lot of bulky, printed information about the plan and that can really put people off. By flagging the most important notices, I think I'm letting people know this is one piece of information that will really benefit them. It cuts out a lot of the confusion factor for people," said Ms. Owens.
In May, Construction Specialties introduced employee investment direction and a wider range of options.
Ms. Owens saves a shocking green paper for the most important announcements. "I have to be careful not to use it too much, or people will stop paying attention."
The attention-grabbing tactics seem to be working. Average participation in the 401(k) plan has doubled among the company's 425 U.S. employees, soaring to 80% from 40% at some locations.
In addition to providing private phones at work, Eljer's human resources staff set up conference calls for employees having trouble with the voice-response system for the $17 million, monthly valued plan.
Nancy Duricic, director of compensation and benefits, said the system receives an average of 500 to 600 calls monthly.
"We try to keep everything we communicate to employees simple and very clear, focusing on understanding the risk spectrum, rather than more complicated investment concepts. For us, a plan design that was conducive to clear understanding was very important," she said.
Ms. Duricic has conducted bilingual employee education meetings at various Eljer locations, using the services of a Spanish speaking human resources professional to translate the program and answer questions from plan participants. Coopers & Lybrand, New York, the company's record keeper, is working with Eljer to add a Spanish language option to the 401(k) plan in 1995.
RiteAid has about 2,600 drugstores and 30,000 employees, only half of whom are full time. Encouraging participation in the $135 million plan is "a very hard sell," said Tom Foley, assistant director of human resources.
With help from its bundled service provider - Prudential Defined Contribution Plan Services, Moosic, Pa. - RiteAid designed a communications campaign to appeal to younger workers.
The company's brightly colored brand-name logo from its own in-house products is used to tie together all plan communications, creating a strong identification with the plan as a company-sponsored benefit.
A communications video features a young store cashier who explains the advantages of plan participation. "We think the use of a role model seems to be really helping the image of the plan," said Mr. Foley. RiteAid may add a company match to improve participation, which now hovers below 50%.
A combination of low-tech, targeted communications and involvement of employees boosted participation in Lantech's $6 million 401(k) plan, said Jean Cunningham, controller.
In addition to the face-to-face meetings, Lantech publishes an in-house newsletter twice a year.
Further, the company involved workers in the selection of a new 401(k) approach last year and let them vote on whether to revamp the plan. "By making it 'their' decision to adopt a new plan, I think we gave them a real sense of ownership of the benefit plan," said Ms. Cunningham.
The communications program has produced good results, with plan participation rising to 92% when new options were introduced last year, up from 83%.
The plan has had a 7.5% overall increase in the amount of employee contributions, a 30% increase in employee contributions over the 6% matched by the company.
Even better, the investment education program the company has implemented resulted in a complete reversal of investment allocation, said Ms. Cunningham. Under the new plan, more than 70% of employee assets are invested in equities and 30% in fixed income. The old plan had the reverse allocation.
"I think what we've been doing has been working very well, even if it isn't really high-tech," said Ms. Cunningham.
At KPIX, a Westinghouse Broadcasting Inc. subsidiary, employees participate in Westinghouse's more than $3 billion 401(k) plan. Benefit functions, however are handled by each unit.
Earlier this year, when KPIX held a meeting to introduce new investment options, most of the male employees attended and most of the female employees stayed away.
"We were pretty shocked to find that few of our women employees attended the meeting," said Ethel Resetz, human resources administrator. "Women ... may have been intimidated by the meeting set-up."
KPIX set up a separate, women-only investment education seminar, with the help of Brian Schaefer, president of 401(k) Ventures, Palo Alto, Calif. Nancy Weeks, an independent financial planner, taught the seminar.