Agenda

1
Agenda

• Demographics Stefani Tygar Barnes
• Trends in Gen Y Retirement Bebe Twyman
• Technology and Gen Y Jennifer Chmel
• Keeping the money in the system Carolyn
  Richardson
• Questions from the Audience

2

• Overview and Demographics
• Stefani Tygar Barnes
• Deloitte Consulting LLP

3
Retirement Lifestages
Pre-hire/ enrollment Born 1978 1995 80 Million
Accumulation years Born 1965 1978 63 Million
Pre-retirement Born 1946 1964 78 Million
Post-retirement Born 1925 1945 75 Million
Source 2006 U.S. Census Bureau
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Gen Y Who are they?

• 80 million people
• Self-confident
• Achievement oriented
• Technology savvy
• Phones for texting, not talking

• Brand loyal
• Civic minded
• Global focus
• Conservative!
• Understand that retirement saving is important

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Why is Gen Y important to retirement now?

• They are a large population and will be the
  primary beneficiaries of Boomer assets
• Near-term, providers are focusing on retaining
  Boomer assets as they exit the workplace
• Longer-term, providers should be focused on
  establishing solid, sticky relationships with
  Gen Y

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Todays Discussion

• Building relationships with Gen Y
• Be socially responsible
• Easybut conservative
• Make it fun
• Give feedback
• Im special
• Family matters
• Chat now

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Priorities for Providers

• 1. Be socially responsible
• Offer socially responsible investment options
• Communicate how your business contributes to
  society (e.g. gifts of time, product and/or
  dollars)
• Create charitable opportunities for members
• Make it all easy!

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Priorities for Providers

• 2. Easybut conservative
• Auto pilot programs will continue to resonate
  well
• Technology can and should be used to attract Gen
  Y, but remember they are a fundamentally
  self-confident and conservative group
• As with previous generations its important that
  they feel confident about the security of their
  investments
• They are achievement-oriented and will want to
  know whether or not they are "winning" the game
  so make it fun!

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Priorities for Providers

• 3. Make it fun
• This generation, along with Gen X, have been
  dubbed "the gaming" generation
• Consider developing a rewards points system
• Gain levels or points through web utilization,
  higher asset, etc.
• Spend accumulated points on special access to
  advanced tools, education, advice, charitable
  influence etc.
• Gen Ys success has been communicated to them via
  technology since they were borngive them
  feedback!

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Priorities for Providers

• 4. Give feedback
• Statements seem old fashioned to Gen Y- something
  they only access if they perceive a problem
• They'll look for text messages that quickly tell
  them if they are on track, and if not, they'll
  expect a bullet point or two that tells them how
  they can get back on track, click and take
  immediate action
• If Im winning tell me Im special!

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Priorities for Providers

• 5. Im special
• Based on a points accumulation system, consider
  an exclusive online winners community
• Give them tools/options to get even farther ahead
  
• Gen Y is very sociable - allow them to text, IM
  or email a (fun) notification to their parents
  and/or family and friends that they are
  succeedingbecause family matters to Gen Y

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Priorities for Providers

• 6. Family Matters
• Consider ways to engage Boomers in sharing their
  retirement lessons learned with their children
• Robust relationships with beneficiaries (i.e. Gen
  Y) through their parents might provide a warm
  introduction to your business
• Help generations connect with each other through
  the winners circle - allow text, IM or email
  will be great toolsbut they will want to chat
  with the experts

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Priorities for Providers

• 7. Chat NOW
• Gen Y prefers not to talk on the phone, and call
  centers may evolve into chat centers
• Providers are working on figuring out compliance
  issues related to chat now
• There are a number of efficiencies gained with
  chat tools - including a chat-reps ability to
  communicate with several customers at once
• Segmenting the level of chat assistance should be
  considered

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Generation Y

• Represents 80 million people under 30 years old
  who may offer a long, loyal relationship to the
  provider who can
• Be socially responsible
• Make things easybut conservative
• Keep it fun
• Give feedback
• Make them feel special
• Consider multi-generation connections
• Offer instant chat

15
Thank you!
16
Americas Youngest Workers Ready to Embrace
Retirement Redesign

• Prudential Retirements Fifth Annual
• Workplace Report on Retirement Planning
• Bebe Twyman
• Prudential Retirement

INST-20080425-A026890
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About Our Survey

• Quantitative research
• Test attitudes among Americas youngest and
  oldest workers regarding new auto-pilot
  retirement plans
• The survey criteria
• Age segments 21-30 and 55-64
• Gender mix sufficient for comparative purposes
• Plan sponsor must offer workplace DC savings plan
  option
• Plan participant is preferred but not required
  for survey
• Survey logistics
• Fielded in August/September 2006 by an
  independent research firm
• Targeted a total of 600 respondents, 300 in each
  age cohort

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General Structure of the Survey

• Youngest workers
• If you changed jobs and were offered a new
  retirement plan with auto-pilot features, how
  do you think you would feel about that?
• Oldest workers
• How do you think you would feel today if your
  retirement plan had auto-pilot features when
  you started working 30 years ago?
• Oldest workers
• Knowing what you now know, would you recommend
  auto-pilot plans for todays youngest workers?

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What Did We Learn?
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Youngest Workers Appear Ready to Embrace a
Radical Redesign of the Nations Retirement
Programs
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Youngest Workers Would Welcome Automatic
Enrollment
If you changed jobs today, and your new
retirement savings plan automatically enrolled
you, how would you feel about it compared with
the more traditional do-it-yourself approach?
22
Youngest Workers Would Feel Good About Minimum
Contribution Levels
If you changed jobs today, and your new
retirement savings plan automatically set a
minimum contribution level for you, how would you
feel about it compared with the more traditional
do-it-yourself approach?
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Youngest Workers Would Feel Good About Automatic
Contribution Increases
If you changed jobs today, and your new
retirement savings plan automatically increased
your contribution amount on a gradual basis, how
would you feel about it compared with the more
traditional do-it-yourself approach?
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Youngest Workers May Be Slightly Wary of
Automatic Investment Allocation
If you changed jobs today, and your new
retirement savings plan included an automatic
asset allocation feature, how would you feel
about it compared with the more traditional
do-it-yourself approach?
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Youngest Workers Would Welcome Lifetime Income
Default at Retirement
If you changed jobs today, and your new
retirement savings plan included an automatic
default that provided you with a guaranteed
monthly income at retirement, how would you feel
about compared with the more traditional
do-it-yourself approach?
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Youngest Workers Would Welcome Entire Auto-Pilot
Retirement Program
If you changed jobs today, and your new
retirement savings plan used the entire package
of auto-pilot features, instead of the
traditional do-it-yourself approach, how would
you feel?
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Oldest Workers Wish Wed Had Auto-Features

• Feature grateful/optimistic
• Auto-Enrollment
  75
• Minimum Contribution Defaults 75
• Auto-Contribution Increases 68
• Auto-Investment Allocation 60
• Lifetime Income Defaults 70
• The entire Auto-Program 70

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Our Conclusions

• In a contrast to our experience with older
  workerswho have reluctantly accepted DC
  retirement planstodays youngest workers appear
  eager to embrace a radical redesign of U.S.
  retirement plans.
• When we asked older workers whether they would
  recommend auto-pilot retirement plans to young
  workers, they overwhelmingly said yes!
• Fully three-quarters (76) of older workers
  recommend the entire auto-pilot package versus
  fewer than one-fifth (19) who recommend the
  traditional do-it-yourself approach.
• Each of the five individual auto-pilot components
  is recommended over the traditional option by a
  minimum of 70 of older workers and an average of
  75, versus an average of just 19 recommending
  that young workers use a do-it-yourself approach.

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Thank you!
Prudential Retirement
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Technology Innovation to Serve Gen Y

• Jennifer Chmel
• Assistant Vice President
• New Business
• FASCore/Great-West Life Annuity Insurance
  Company

FASCore is a service mark of FASCore, LLC. 
FASCore, LLC (FASCore Administrators, LLC in
California) is a wholly owned subsidiary of
Great-West Life Annuity Insurance Company.
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Agenda

• Technology stats on Gen Y
• Getting Gen Y invested
• Keeping Gen Y invested
• Challenges
• Action plan

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Technology Stats on Gen Y

• 97 own a computer
• 94 own a cell phone
• 76 use IM
• 15 of IM users are logged on 24/7
• 34 use websites as their primary source of news
• 28 own blog
• 44 read blog
• 49 download music using peer-to-peer files
  sharing
• 75 of college students have a Facebook account
• 60 own some type of portable music and/or video
  device (iPod)

Source - "Connecting to the Net.Generation What
Higher Education Professionals Need to Know About
Today's Students", Reynol Junco and Jeanna
Mastrodicasa (2007)
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Getting Gen Y Invested
Marketing Tactics Geared Toward Gen Y
Auto Features

• Auto enrollment
• Minimum contribution defaults
• Auto default investment/allocation
• Auto contribution increase

• Web chats / Webinars
• Graphical content
• Podcasts
• Blogging
• Presentation with pizza parties, games, and
  technology gadget drawings

Source - Pitching 401(k)s to Generation Y is a
tough sell - Sept. 27, 2006 the Wall Street
Journal
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Keeping Gen Y InvestedAccess to Information
Personalized
Content
Style

• Alerts in addition to reporting / statements
• Graphical
• Rewards point system web utilization or higher
  assets receive points to be used on managed
  accounts and other for fee services
• Feedback

• Alerts
• Outbound communication
• Web pages
• Radio programs create a composite of audio news
  clips to be downloaded onto iPods and other MP3
  players

• Easy access IM, texting, web chating, phone,
  and auto features
• Immediate wired 24/7

Source - Pitching 401(k)s to Generation Y is a
tough sell - Sept. 27, 2006 the Wall Street
Journal
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Technology Challenges

• Where to spend your technology dollars to match
  participant assets?
• Baby boomer vs. Gen Y
• Compliance on IM, texting, and web chating
• Technology
• Cost
• Having up-to-date screen names and cell phone
  numbers in addition to emails
• Collecting, storing and acting upon notification
  preferences

The DigitaLedge blog July 25, 2007 in Gadgets
and Gear, Trends, and Apple - IM vs. Testing
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Action Plan
- Participant ages - Plan size - Location
Know your plan demographics
With multiple generations within a plan, does
your system / vendor have the flexibility to
offer different communication for different
audiences, i.e. no paper enrollment books for Gen
Y but offer a webcast instead?
Flexible communication touch points
Hire Gen Y
Hire Gen Y for IT jobs, marketing, and customer
service and start learning text ling (source
netlingo.com)

• Gradually deliver / offer some forms of Gen Y
  technology
• Auto features
• Marketing webinars, podcasts, and blogging
• Communication through alerts, web pages, IM,
  Texting, and personalized radio programs

Gradually deliver Gen Y technology
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Thank you!
FASCore / Great-West Retirement
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Keeping Gen YInvested in Retirement

• Carolyn Richardson
• Sales Director
• RolloverSystems, Inc.

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Challenges

• Young job changers
• Small balance mindset
• Proclivity to cash out
• Below the radar of other stakeholders
• Plan Sponsor
• Provider
• Advisor
• Lack of targeted, meaningful education
• Limited access to IRA rollover solutions

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Keys to Success Starts with Sponsor

• Commitment to help employees stay invested in
  retirement
• Adoption of a rollover program
• Automatic rollovers (no minimum balance)
• Targeted, meaningful participant education
• Integrated access to rollover options/solutions
• Seamless execution
• Distribution request process conducive to helping
  participants stay invested

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Keys to Success Ends with Participant

• Education
• Help
• Access to IRA rollover solutions
• Ease and immediacy of transaction
• Split distributions
• Cash out not really an option

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Rollover Case Study Situation

• Large employer plan was underperforming with
  nearly 35 of its estimated 200,000 participants
  inactive (term deferred), most young
  participants with small balances
• Annual turnover averaged more than 20
• Excess of small balance and in many cases missing
  participants caused significant increase in
  Fiduciary concerns, administrative burdens and
  plan costs

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Rollover Case Study Remedy

• Implement an integrated Rollover program
• Educate participants on the importance of staying
  invested in retirement
• Encourage inactive (term deferred) participants
  to take control of their retirement savings
• Deliver integrated program to new, on-going
  terminated participants

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Rollover Case Study Outcome

• Managed more than 18 campaigns to locate and
  educate 70,000 participants
• 62,000 stayed invested in retirement electing to
  rollover to an IRA or new plan, were auto rolled
  or if allowed, stayed in the plan
• The plan sponsor will save 765,000 annually in
  plan administration costs
• The plan sponsor is totally committed to the
  program, increasing the likelihood that
  terminated participants take control and stay
  invested in retirement

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Thank You
RolloverSystems
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Questions?