DC plan executives get serious about playing games

Defined contribution plan executives, providers, tech firms and academics are all giving "gamification" techniques a closer look in hopes of driving participant engagement and financial literacy.

"Over the past few years there has been an increase in elements of gamification within the digital retirement space," said Olivia Jack, New York-based retirement industry analyst at market research firm Corporate Insight Inc.

Gamification elements, which include online games and challenges, peer comparisons and interactive education tools are all "cropping up" on record keepers' participant websites and mobile apps, she said.

Much of this stems from the industry's focus on finding ways to get more employees thinking about and preparing for their financial futures, Ms. Jack said.

Driving engagement among defined contribution plan participants "is definitely one of the most prevalent conversations across the industry for sponsors and record keepers," she observed.

While "a lot of (the) rhetoric in the retirement industry has been around 'setting it and forgetting it,'" gamification techniques "can encourage participants to go on their retirement websites and check if they are on track to meet their goals," Ms. Jack said.

Plan executives and record keepers also are turning to gamification to make their educational content more engaging.

A 2016 Corporate Insight survey of participants in employer-sponsored DC plans suggests there is much work to be done.

Of the approximately 1,500 respondents, only 12% said they had accessed educational content on their participant website within the past year.

Retirement plan service providers "are all kind of realizing that people don't have time to read booklets," said Lisa Blasdale, a former benefits manager at Staples Inc. They are asking themselves, "how can we deliver information that people need in a way that it is going to grab their attention and they will learn something even if they can only spend 10 to 15 minutes on it?" Ms. Blasdale said.

Ms. Blasdale was part of the team at Staples Inc. that partnered with Commonwealth in 2011 to bring the organization's financial education games to Staples' workforce, which included hourly retail and salaried employees. Commonwealth, formerly the Doorways to Dreams Fund, focuses on creating games and other tools to drive financial security.

"Bite Club" — one of the games used by Staples — taught players how to balance running a business (a vampire night club), pay off debt and save for retirement.

The game, which took employees about 20 to 25 minutes to play, was customized for Staples employees to include information about Staples' 401(k) plan and information from its record keeper at the time, New York Life Retirement Plan Services. (New York Life won an Eddy award from Pensions & Investments' for the Staples-sponsored version of "Bite Club" in 2012.)

Ms. Blasdale said Staples saw an increase in 401(k) enrollments and employee contribution rates after "Bite Club" was introduced in 2011. A spokesman for Staples declined to comment.

Nick Maynard, Boston-based senior vice president at Commonwealth, believes Staples' success with "Bite Club" showed employees are "interested in engaging with video games as a tool to take that next step related to their retirement plan."

That being said, there is still a challenge today in terms of how "game-y" plan sponsors and providers want to go, he said.

In Mr. Maynard's view, true gamification is "taking what is cool about video games and using that to drive real world engagement."

Staples "was definitely on the leading edge," he said.

Smaller elements of gamification, such as financial education quizzes and earning badges, are more common in the retirement space today.

At Synopsys Inc., Mountain View, Calif., retirement plan executives saw an increase in the number of employees taking action in the company's $1 billion 401(k) plan after it rolled out a retirement plan quiz and raffle in 2017.

Kerstin Aiello, senior benefits manager at the software design and testing company, said plan executives viewed the quiz as a way to communicate and test employees' knowledge of complex plan features such as "after-tax contributions with an in-plan Roth conversion."

Engineers "really love testing themselves," she said. "(We) noticed by the hits that they repeatedly took the quiz until they got 100%."

About 25% of the company's 4,600 employees ended up taking the quiz and were entered into a drawing for a Fitbit One Fitness fitness tracker, among other prizes.

Synopsys worked with Benz Communications, a San Francisco-based employee benefits communications agency, to build the quiz.

At consulting firm StoneStreet Equity LLC, plan sponsor clients are using financial education and savings challenges from TIAA-CREF and Principal Financial Group Inc. to engage employees, said Heidi Sidley, a White Plains, N.Y.-based principal and managing director.

In "Square Up Your Savings" — a TIAA challenge — participants aim to place as many squares on a map as they can by doing things like setting goals and answering retirement questions like, "What's a catch-up contribution?"

Maps are customized to employers' locations.

In TIAA's "What's Your Financial IQ?" challenge, players compete against their peers in a series of financial education quizzes.

The more employees play, the greater their chances are of winning prizes provided by their employers, Ms. Sidley said.

One large 403(b) client in New York, for instance, raffled off iPad Minis, Ms. Sidley said. She declined to identify the client.

Over a seven-month period, 22% and 28% of TIAA participants, respectively, who took the Square Up and Financial IQ challenges took action in their retirement plans afterwards, according to TIAA.

For both challenges, the highest repeat players were between 24 and 34 years of age, and 70% or more of the players were women.

In "You've Earned It!" — a savings challenge from Principal Financial Group — participants earn digital badges for taking actions such as maximizing their employer's match or contributing 10% or more of their salaries. Participants can see the badges they have and haven't earned when they log into their accounts.

Ms. Sidley believes millennials are driven by earning badges.

"They want their landing homepage to show they've done everything they are supposed to do. They don't want anything grayed out," she said.

Prinicipal is still collecting results for the program, which was launched in January.

What started as an internal training tool for interns, turned into Wells Fargo's "Retirement City" — an online retirement education game introduced to the public early last year.

In "Retirement City," players select avatars and journey through neighborhoods that deal with various themes, such as savings, DC plan contributions, financial planning and rebalancing. As players move through the neighborhoods, they are presented with, among other things, quizzes, calculators, simulated life events and resource allocation challenges, where they're awarded points based on their choices — for instance, buy a new car or used car or take public transportation?

Players also can see how others answered the questions.

The game is available to both Wells Fargo and non-Wells Fargo client participants.

An internal survey of roughly 2,000 employees at a dozen companies found that 72% who were not already participating in their company's retirement plan said they were likely to enroll after playing the game, said Jon Graff, Charlotte, N.C.-based senior vice president, participant services director at Wells Fargo Institutional Retirement and Trust. Among current participants, 62% said they were likely to make changes to their accounts, such as increasing their savings rates or changing their asset allocations.

There is "a lot of energy" in the gaming space that the retirement industry "can take advantage of and should take advantage of," Mr. Graff said, noting a 2015 survey by Pew Research Center that found 49% of American adults play video games, with a nearly even split between men and women.

In Ms. Sidley's view, retirement games should be fully interactive, offer some level of competition against the player or peers, and provide a chance to win something.

The ability to drive long-term constructive behavior is critical, added Ashby Monk, Los Gatos, Calif.-based executive and research director at the Stanford Global Projects Center and co-founder and chairman of "Long Game Savings" — an app that uses games and cash prizes to encourage players to build up their savings.

"To build a resonant game that gains traction and engages users, developers should involve users in the design and development process," Commonwealth's Mr. Maynard stressed. (All of Commonwealth games are tested with financially vulnerable adults ages 18-35.)

Use the game experience that users want — whether that be "Candy Crush" or something else — to drive real-world action, Mr. Maynard said.