NEW YORK - General Motors Corp.'s education campaign, which included a new defined contribution plan website, was the culmination of two years work revamping its plan and its education program.
In late 1999, executives began restructuring the company's $25 billion in defined contribution plans, starting with its salaried employees' 401(k) plan, said Charles Tschampion, managing director of defined contribution plans for General Motors Asset Management, General Motors' investing arm. GM executives added a set of what it calls Promark funds, investments that were also part of General Motors $80 billion defined benefit plan, to the existing menu of 40 mutual funds managed by Fidelity Investments, Boston, for a total of 76 investment options in the plan, he said.
These changes were made to the hourly plan in April. Three months later, GM enhanced its match, to 80 cents on the dollar up to the first 6% of pay, from 70 cents on the dollar up to 6%, Mr. Tschampion said.
Keeping it simple
General Motors executives designed the education and communication campaign that included print materials, a new magazine and a new website to help plan participants work through the vast array of investment options.
"One of the goals was to take the large number of investment options and give participants a way, without advice, to sort through the investment options and find the options that were the right ones for them," Mr. Tschampion said.
Also, there are complex concepts to explain, such as 401(k) savings and after-tax savings, he said.
"We wanted to be able to educate, to have informed participants and informed consumers, but we did not feel we wanted to be at the level of telling somebody what they should have as an asset mix or certain funds," Mr. Tschampion explained. "We do not feel plan sponsors or advisers who offer investment products should offer investment advice."
However, General Motors executives are investigating adding the services of an independent advice provider.
Before last year, General Motors did not have its own website for 401(k) plan participants, he said. Instead, participants used Fidelity Investments' NetBenefits education and asset allocation modeling website.
With the new website, participants can learn about each of the investments offered in the plan and choose a set of funds using questionnaires and other tools, Mr. Tschampion said. Plus, there is a button leading participants to Fidelity's website.
So far, the website has been popular, he said. When participants had only Fidelity's site, the site received 36,000 hits per month. Today, the General Motors website launched last year gets 385,000 hits a month. Participation also increased to 87% from 82% since 1997. The enhanced match also could have contributed to this increase, he said.
