Pensions & Investments is now accepting entries for the 1996 Defined Contribution Plan Investment Education Awards.
The deadline is Oct. 1.
The awards will be presented at P&I's Defined Contribution Conference, Jan. 23-24, at the Grand Hyatt Hotel, New York. Award winners will be asked to discuss their programs during the conference.
Competition is expected to be keen. Last year - the first year P&I sponsored the awards - 103 entries were submitted from 62 companies.
The educational programs don't have to be fancy and glossy. Last year, for example, some were low-cost materials developed in-house with simple computer-generated, photocopied artwork. Others were beautiful and glossy full-color campaigns rivaling the best advertising programs of the Madison Avenue agencies.
The key, this year as last, is effectiveness.
What's wanted are programs specially designed to improve the savings and investment habits of American workers. And, entrants must show the effectiveness of their programs, perhaps through an increase in participation or a change in asset allocation in their participant-directed plans.
The most successful programs last year were those where the look, tone and content of the materials closely matched the character or image of the company and its work force. Last year, for example, Nestle USA Inc., Solon, Ohio, entered a more sober print entry than many other sponsors, but that approach effectively matched the conservative nature of the company's Swiss parentage, and it was effective in encouraging employee participation and improving investment processes. As a result, the entry tied for first in the largest size category - more than 5,000 employees.
Sometimes, customization is the secret. Among last year's winners was trucking company J.B. Hunt of Lowell, Ark., which tied for first with Nestle in the large company category. The company's program featured a trucking theme, targeting its on-the-road employees.
One entry that did not win last year had a sophisticated video based on a computer theme. Judges felt the company's mostly blue-collar work force wouldn't identify closely with that theme.
Last year's judges found the best entries used brochures, newsletters or video tapes that had been tailored to the features of the sponsor's plan, not just generic investment education materials.
For example, the judges were most impressed with educational programs describing the actual funds offered as plan options within educational materials. Mass-produced print or video materials that described generic equity or fixed-income funds without any sponsor tie-in were not as compelling.
Another consideration is close identification with the sponsor. Some attractive entries lost ground last year because the programs were not tied to the employer.
Norm Thomson Outfitters Inc., Portland, Ore., won the initial print campaign category for companies with fewer than 1,000 employees. Its entry's graphics, designed with help from Arnerich Massena Associates, Seattle, emphasized mountain climbing, a theme tied in with the company's business. Norm Thomson's employees sell outdoor equipment.
The rules for entry remain the same as last year. The contest will accept entries only from plan sponsors, who may have prepared the materials internally or with the assistance of an outside vendor. Winners from last year may submit only new materials for consideration.
The investment education contest is designed to recognize the best practices among defined contribution plans. This year's judges will stress at least 16 different points in scoring the effectiveness of each entry received.
Materials submitted should emphasize early and regular saving. The investment education materials should discuss the power of compounding and dollar cost averaging across the course of an employee's retirement savings years. The dangers of inflation should also be discussed. An in-depth explanation of risk and the relationship between risk and return is vital. Materials are also expected to detail the use of investment diversification as a tool to reduce volatility and risk.
The historical performance of stocks, bonds and cash over the long term needs to be explained to plan participants to help them formulate wise asset allocations.
Ideally, plans should offer features that make investment management of participant accounts easier, such as voice response systems, software programs and kiosks.