Pensions & Investments is now accepting entries for the 1997 Defined Contribution Plan Investment Education Awards.
The deadline is Oct. 1.
The awards, the third annual, will be presented at P&I's Defined Contribution Conference, Jan. 27 and 28 at the Marriott Marquis Hotel, New York.
Award winners will be asked to discuss their programs during the conference.
Competition is expected to be keen. Last year, there were more than 90 investment education programs submitted for consideration.
The winning educational programs don't have to be fancy and glossy, but they must be effective.
What's wanted are programs specially designed to improve the savings and investment habits of American workers. 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 winning educational campaigns in the past have shared several characteristics:
*The use of materials (brochures, newsletters, video or audio tapes) tailored to the features of the sponsor's plan, not just generic investment education materials.
For example, programs should describe the actual funds offered as plan options within educational materials, instead of using mass-produced materials that describe generic funds without any sponsor tie-in.
*The materials and education campaigns have close identification with the sponsor.
For example, one of the 1996 winners, Chrysler Corp., used the company's rich heritage as an automobile manufacturer to great effect. Its video showed Chrysler products as well as snippets of familiar Chrysler television commercials.
The rules for entry remain the same. 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.
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 also are 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.
P&I's awards recognize sponsors' efforts to educate their employees about the complexities of investing their defined contribution plan assets, and the importance of saving enough for retirement.
The contest attempts to identify the best practices in investment education. By example, it is hoped other companies are encouraged to fine-tune their education programs and to demand better quality materials from their vendors.
The awards are given for three types of educational programs: printed initial brochures; printed ongoing education; and videos. Contestants are judged against peers with similar numbers of employees.