Implementation of 1e plans for large companies – What are the main challenges?
On behalf of finpension 1e Collective Foundation, the Lucerne University of Applied Sciences and Arts – Business has written a student thesis entitled “Challenges in the implementation of 1e plans in large companies”. In a first step, interviews with companies that already rely on 1e plans were conducted to identify the challenges of implementation. Thanks to the experience already gained by these companies, recommendations for efficient and targeted implementation could be derived in a second step.
Communication – Key to acceptance by employees
Communication plays an essential role during the implementation process. Due to the differences between 1e plans and conventional pension fund solutions, employees must be informed specifically and precisely about the 1e plan. They must understand the differences to the previous solution. Companies have chosen to use the following information channels or a combination of them: e-mails, leaflets, workshops, information meetings and roadshows. It is important that the communication process is clearly defined in advance. Employees must receive the necessary information and have defined contact persons in case of any uncertainties. The research has shown that in cases of unclear and insufficient communication, the resistance and scepticism of employees was very high.
Digital access – Must have for large companies
A further finding of the study was that large companies expect digital access for their insured persons in the context of 1e solutions. The insured persons should have efficient and easy access to their data, to the investment strategy with performance details and be able to change strategies independently online.
Risk disclosure and investment strategy selection – Employees need support
Risk disclosure, risk profiling and investment strategy selection are core processes for employees in 1e plans. Research has shown, that in the absence of a guided process, insured persons are not concerned about investment strategy selection and are choosing the default strategy in 95 % of the cases. This result clearly shows that there is a need to educate insured persons about investment risks and to recommend an investment strategy based on the risk profile. This is the only way for the insured persons to be able to make an effective decision.
Recommendations for action already implemented
In order to make the finpension 1e solution more attractive for large companies, the knowledge gained has already been implemented into the offer and the online platform. For example, the onboarding process with risk information, risk profiling and strategy recommendations have been completely digitalized. This provides insured persons with the foundation for assuming responsibility and actively selecting the appropriate investment strategy. In addition, this process is tailor-made for each insured person. As a result, the insured persons receive exactly the personal and relevant information they need. For instance, in the onboarding process, the declaration of beneficiaries is only addressed for unmarried policyholders, as it is irrelevant for married policyholders. In the future, finpension will continue to improve and expand its digital offer in order to provide all companies and insured persons with transparent, digital and efficient service.