Voya Offers Employers a New Way to Measure the Health of Retirement Plans with 'Check-Up Report'

"Our goal is to help more sponsors — and ultimately their employees — stay on the right path to financial well-being," said Charlie Nelson, CEO of Retirement for Voya Financial.

The Retirement Check-Up Report is the follow-up to a Voya whitepaper entitled "Using Decision Styles to Improve Financial Outcomes – Why Every Plan Needs a Retirement Check-Up." The paper was written by behavioral economist Dr. Shlomo Benartzi, UCLA Anderson School of Management professor and a senior academic advisor to Voya's Behavioral Finance Institute for Innovation. "For the first time, employers can measure whether or not participants are engaging in a reflective thought process when making important decisions about their retirement plan," noted Dr. Benartzi.

By looking at the digital behaviors that lead to certain savings rates and investment choices, employers are able to obtain a unique view of their plan that they've never had before. "If a plan's average replacement income rate appears to be off track based on its Report score, this can help the employer evaluate its options to get back on course, including a plan re-enrollment strategy," added Nelson.

The whitepaper examined how people make decisions using two different styles — "instinctive" (quick and without much thought) and "reflective" (slow and deliberate). Applying this to the digital environment, Voya was able to study and categorize the decision styles of retirement plans¹. An index scoring system — the Reflection Index — was developed by looking at three dimensions of activity: 1) whether participants paid attention online; 2) whether they gathered additional information; and 3) whether they made any trade-offs.²

Through this research, Voya found a significant correlation between a plan's Reflection Index score and the average projected retirement income of its participants. A plan that had more instinctive decision-making participants was far more likely to have lower aggregated projected replacement income (below a 70% goal). Voya's analysis found 90% of plans were "off track" in terms of projected income and were categorized as being "instinctive" due to their participants' digital decision-making styles.

Other research has shown many individuals don't take action to change their savings rates or re-balance their accounts once they enroll in a plan³. The new Check-Up Report can serve as a tool to help plans learn when to "course correct" and consider plan re-enrollment. 

Get a Score, Set a Course Correction

For thousands of Voya plan sponsors⁴ and the millions of participants they represent, Voya can create a unique Check-Up Report score report that lets an employer measure whether its plan, in the aggregate, is instinctive or reflective based on the digital activity of its participants.

With more consumers making financial decisions on screens, phones and mobile devices — including choices about retirement savings — the need to pause and take time to course correct has never been greater.

"The good news is that even if a plan is not on the right path, there are a number of well-tested and readily available options a sponsor can consider to create a healthier plan," added Nelson. "From auto-enrollment and auto-escalation features to re-enrollment strategies and better employer matching and default options, these tactics are generally easy to implement.  Plan advisors can also use this as a tool to deepen relationships and continue to add value to a sponsor."

Voya clients that are interested in a Retirement Check-Up Report can work with their plan advisor or relationship management contact to discuss how to turn these options into a successful action plan. More information is available at Go.voya.com/reflectionindexvideo. To stay current on the latest research findings from the Voya Behavioral Finance Institute for Innovation, please visit Voya.com/behavioralfinance.

Media Contact:
Joe Loparco
Voya Financial
Office: (860) 580-2677
Cell: (860) 462-6525
[email protected]

About Voya Financial^®
Voya Financial, Inc. (NYSE: VOYA), helps Americans plan, invest and protect their savings — to get ready to retire better. Serving the financial needs of approximately 13.6 million individual and institutional customers in the United States, Voya is a Fortune 500 company that had $11 billion in revenue in 2016. The company had $505 billion in total assets under management and administration as of March 31, 2017. With a clear mission to make a secure financial future possible — one person, one family, one institution at a time — Voya's vision is to be America's Retirement Company^®. Certified as a "Great Place to Work" by the Great Place to Work^® Institute, Voya is equally committed to conducting business in a way that is socially, environmentally, economically and ethically responsible and has been recognized as one of the 2017 World's Most Ethical Companies^® by the Ethisphere Institute, as well as one of the Top Green Companies in the U.S., by Newsweek magazine. For more information, visit voya.com. Follow Voya Financial on Facebook and Twitter @Voya.

SOURCE Voya Financial, Inc.

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