N.Y. Deferred Comp plan offers a lifeline during virus turmoil

As the coronavirus stampeded through the nation's economy, executives of the New York State Deferred Compensation Plan moved quickly to keep participants informed to prevent reductions or delays in services even though the virus' impact thwarted many traditional sources of participant education and advice.

Working with their record keeper, Nationwide Retirement Solutions, plan executives had to act decisively because the coronavirus put a halt to all direct personal contacts between participants and plan staff members and account executives.

Nationwide suspended visits — one-on-one sessions and group meetings — to employers on March 13. The plan's call center in Troy, N.Y., about six miles from the plan's headquarters in Albany, was forced to close March 16 due to a statewide lockdown order from Gov. Andrew Cuomo. All 28 call-center counselors and staff had to work from home. There is no timetable for reopening.

Plan officials and record-keeper executives expanded call-center activities, added a series of webinars, enlisted more staffers for the call center and enacted changes that enabled participants to receive timely responses.

As a result, "our business continuity disaster recovery plan allowed us to maintain 100% availability and uninterrupted service," Executive Director David Fischer said in an email interview. "The core messaging, such as the need to save for retirement, didn't really change."

Additions to the plan's education messages focused on "the changes brought about by COVID and the CARES Act," wrote Mr. Fischer, referring to the Coronavirus Aid, Relief and Economic Security Act. "It was important for our participants to understand their new options."

The actions took place during the first quarter, when total plan assets had declined, transfers to stable value were greater than normal and first-quarter distributions were 10% higher than the year-ago period. Total plan assets fell to $24.1 billion as of March 31, down 12.6% from the $27.5 billion on Dec. 31. However, assets rebounded to reach $29.5 billion by Aug. 31.

Flows to stable value during the second quarter were "way down," he said. "July and August bumped up but not like earlier in the year."

Distributions were above normal in April and May and about twice the normal amount in June through August. "We would expect that increase is almost solely due to COVID," Mr. Fischer said. "Seasonally you would normally only see increases in December and January due to required minimum distributions and holiday shopping."

The New York State Deferred Compensation Plan has had contingency plans in place for years. One such plan was established for strong winter snowstorms, a common occurrence in upstate New York, when Nationwide would assign representatives from its Columbus, Ohio, headquarters to help with call center inquiries.

The coronavirus has been far more enduring than a snowstorm.

Average daily call volume had been 960 calls for the two years prior to the coronavirus outbreak, Mr. Fischer wrote. However, the plan received more than 1,000 calls daily during 16 days in March, including some days in which the volume was 50% higher than normal, he added. On March 9, the plan received 1,610 calls, which represented the largest single-day number in 17 years.

"Call volume in March exceeded our planned capacity and, due to the nature of the calls, average talk time was longer than normal," Mr. Fischer said.

Acting on a recommendation by Sharon Lukacs, the plan's deputy director, Nationwide began assigning field staff to assist call-center staff effective March 30. Sixteen field representatives began taking three-hour daily shifts for the plan's help line, increasing the plan's call-taking ability by 45%, Mr. Fischer wrote. Account executives haven't resumed visits to employers, and they continue to help fielding phone calls. The plan's website also has posted contact information about the field representatives — name, photo, telephone number, email and counties they serve — so participants can discuss their accounts. "Our online services are working very well," Mr. Fischer wrote.

To make sure the flood of calls didn't cause frustrated and worried participants to wait for service, the plan instituted a call-back service on March 23. "The participants can hang up, go about their business and receive a call back from us when their place in line comes up," Mr. Fischer wrote."

During the first quarter, participants' phone calls were "somewhere between fear and panic over losses associated with massive daily declines in the broader stock market, combined with uncertainty in the labor market," Mr. Fischer wrote.

The representatives' responses ranged from "hand holding" to "talking people off the ledge" with a heavy emphasis on empathy, he added. Calls during the second quarter returned to more normal levels. "There are still plenty of calls, but it is down from earlier this year." Mr. Fischer wrote. "Some calls are about how to put money back that was withdrawn."

Because Nationwide representatives still aren't visiting employers for group meetings or one-on-one sessions with participants, the plan has been offering a series of webinars as well as a schedule for virtual and/or phone meetings so participants can discuss their accounts with the representatives. The virtual meetings also can accommodate presentations with small groups.

Although the initial rollout of webinars was planned before the coronavirus struck, it was viewed as "a supplement to the on-site and personal meetings" offered by Nationwide, Mr. Fischer said. Some were offered in February; but in March "the webinars were accelerated" and serve as the "primary method of distributing plan information."

The webinars continue to cover such topics as enrollment, asset allocation and pre-retirement planning on a weekly or biweekly basis.

The webinars "remain very successful, and we have also made an extra effort to involve the participating employers in letting participants know about them," Mr. Fischer wrote.

Surveying the changes made quickly by the plan and its record keeper, Mr. Fischer concluded: "Be prepared for anything and be flexible in how you deliver services."