When Guidance Isn’t Enough

When Teco Energy decided to migrate from an annuity-based plan to apension-equity plan, which is oriented to lump-sum benefits, it became clearthat employees would need considerable help understanding their options, saysDavid Bush, manager of retirement savings plans. As representatives from all theoperating companies within Teco were reviewing the plan, they realized howcomplex it was. “Management began to see the challenges that employees wouldbe facing as a result of the changes,” Bush says.

Previously, Teco had never offered financial education or advice to employeesin any of its 60 locations. “We didn’t have the time or resources to do duediligence on the providers,” Bush says. “Without that, we were reluctant toput our stamp of approval on any vendor.”

But in the wake of the plan changes, finding an investment adviser was deemeda high priority. After reviewing several vendors, Bush chose Edward Jones tooffer one-on-one counseling on-site during the immediate plan transition in2001, and financial-education workshops later on. They chose Edward Jones forseveral reasons. It is national and has offices in all 60 of Teco’s locations,which allowed the company to work with a single vendor to provide investmentadvice to all of its offices. Each location has a single contact who managesservices for that office, and there is one point of contact within Edward Joneswho oversees the entire relationship. That helps to maintain consistency andmakes monitoring easier, Bush says. Teco was also impressed that Jones deliversall workshops and on-site counseling at no charge. “They see it as anopportunity to build long-term relationships with employees.”

While most companies launch their financial-services program by starting withworkshops and easing into counseling, Teco took the opposite approach. Theybegan by immediately offering one-on-one meetings with investment advisers assoon as the relationship with Edward Jones was established. “Our incentiveswere different. We didn’t enter into this because we wanted to offer financialservices,” Bush says. “We needed to provide all the tools available to makethe plan transition as successful as possible.”

In the fall of 2000, as the plan was being rolled out, financial adviserswere brought in to meet with employees aged 55 and over, because they had themost urgent need for retirement planning and had been given the choice to staywith the old plan. “The only way they could make informed decisions was ifthey had someone there to help them,” Bush says. “They didn’t needgeneralized lunch-and-learns. They needed to meet with a financial planner rightaway.”

The following quarter, employees aged 40 to 55 had the chance to meet withadvisers to discuss their retirement planning and get investment advice. Theywere encouraged to bring their spouses, who were also able to get advice ontheir retirement incomes, so that as a family they would be able to see theirwhole investment picture, Bush says.

In the third quarter, employees under 40 were invited to meet with the Jonesrepresentatives.

In July 2001, once all the employees had had the chance to receive counselingand the new plan was rolled out, Jones representatives began offeringfinancial-education workshops. The first three sessions cover investment basics,retirement planning, and company plan distribution options. After those arecomplete, each location will choose which topics it wants delivered according tothe needs of the employee population.

“It’s ironic,” Bush says, reflecting on the activity surrounding theplan transformation and the decision to offer financial advice. “These planshave been in place for a long time, but they’ve never had so much visibility.”

Workforce, May 2002, p. 69 — Subscribe Now!