The Gamification of Retirement

Plan sponsors who are serious about changing worker behavior toward their 401(k) plans might consider injecting a little fun into their retirement programs.

Experts agree: Concepts like gamification are overdue in the 401(k) industry. Surveys show workers are worried about their retirement, and plan sponsors know it. Only 12 percent of 457 plan sponsors said their employees know how much to save for retirement, reported consulting firm Towers Watson & Co. in a November 2014 survey. Only 20 percent said their workforce is comfortable making investment decisions.

The same survey said employers are ready to change. While only 8 percent of plan sponsors surveyed said they use gamification strategies, 78 percent said they plan to increase their use of technology to deliver information over the next several years. The idea isn’t new, but its application in the digital world is exploding with leaders like Fitbit, which uses badge rewards and online interaction with other users to get people moving and living healthier lives.

“It’s just not that interesting going to a seminar or reading a pamphlet,” said Nick Maynard, senior innovation director at nonprofit D2D Fund. “Games have a significant ability to affect participants relative to other traditional means of communications.”

Increasing the use of technology may not exactly mean hitting the play button, but it does send things in a more positive direction.

“Gamification is more in its infancy stage” in terms of 401(k) development, said Heather Tredup, an associate partner at Aon Hewitt. “The question now is: How do we take what we see working and apply it across the benefits community.”

Fidelity Investments introduced its NetBenefits mobile app last year. Similar to leaderboards on many online games, participants can compare their 401(k) account balances and contribution levels with other anonymous Fidelity participants of the same age. They can also filter data by ZIP code, state, region or national statistics, as well as see how they’re doing compared with other age groups.

It’s not a game, but NetBenefits uses gamification strategies to get users to pay attention to what they are doing — or not doing.

Fidelity reported participants checking out their peers’ contribution rates were 17 percent more likely to make a change compared with overall NetBenefits users.

“The 401(k) world has a very challenging, motivational framework, because most people don’t have an emotional attachment with helping their future self,” said Charles Berman, Fidelity’s senior vice president for digital platforms. With NetBenefits, “We’re getting them to pay more attention and to make simple, but important decisions.”