Case study: Communicating a voluntary early retirement program

Since the pandemic turned all of our lives upside down last year, we’ve seen an uptick in clients seeking creative ways to trim organizational costs while minimizing the negative impact on employees—such as voluntary early retirement programs. Voluntary early retirement programs can offer a win-win situation for employers and employees alike, giving employees nearing retirement a financial incentive to leave early while achieving a reduction in labor cost for employers.

This case study shows how Milliman communication consultants helped one such client successfully navigate a voluntary early retirement program.

The challenges

When the coronavirus pandemic struck in early 2020, this organization, like so many others, suddenly found itself facing unexpected financial stress. A reduction in workforce was on the table but first it decided to offer a voluntary early retirement program to a small group of retirement eligible employees in late summer.

This project involved several challenges, including sensitive messaging to accommodate yet not reveal the potential 10% reduction in the workforce on the horizon. The reduction in force was already firmly scheduled, so getting out in front of it required a greatly accelerated timeline. In fact, we had just three weeks from the initial kickoff meeting to create the personalized election packets and deliver them securely to participants. Communications that include personal data require specialized processes and protocols that respect the confidentiality and privacy of that data.

The solutions

Milliman helped set the strategy and implemented the communications for the early retirement offer. Key deliverables included: announcement to leadership; email to managers; brief informational articles for the company intranet; personalized election packet for eligible employees; script for call center representatives; and several follow-up reminder emails. The client’s legal counsel prepared the severance plan and participation agreement included in the election packet. Milliman’s pension website also offered a web modeling tool for those who were considering simultaneous retirement under the pension plan.

The Milliman communications team used several key strategies to address the specific challenges of this project.

• Showing personalized dollar amounts prominently. To ensure employees clearly understood the value of their severance benefit offer, we put their personal payout details on page 1 of the offer letter.
  In addition to the total early retirement offer, we also included dollar amounts for accrued sick and/or vacation payout due upon termination, then summarized the employee’s total payout upon separation. Further descriptions and details about the offer (eligibility, reasons for the offer, application details) were outlined in the inside pages.
• Enhancing employee appreciation through customized statements and communications. Different employee groups potentially need different messaging to make communications relevant to them. In this case, we crafted variable content and data fields to ensure that each letter was personalized, targeted specifically to each employee’s particular circumstance based on age, service, and benefit eligibility.
• Keeping data secure. Due to the enclosed personalized salary and financial information, election packet confidentiality is tantamount whether emailed, mailed, or both. We use time-tested systems that maximize data security for both electronic and print communications.
• Accelerating delivery and managing tight frames. This type of project often has short timelines and rapid turnarounds, and this early retirement offer was no exception. We had only a few weeks to create the custom communications and distribute election packets. Frequent meetings to touch base and meticulous daily tracking helped contribute to the project’s success.
  The election window itself was just two weeks. To give participants maximum time for considering their offer, we emailed election packets in addition to posting them by mail. To ensure secure electronic communications, we set up a temporary email box to distribute encrypted election packets with unique passwords for each recipient.
• Simplifying the election process. To ensure a smooth process for employees, election packets included clear and simple “how to” instructions and a self addressed stamped envelope for returning forms free of charge. To support the client, the Milliman team managed the process of receiving and tracking returned forms, targeting follow-up communications to late responders.
• Setting up systems of support. An early retirement incentive can be a difficult and stressful life decision for many participants. To facilitate a more easeful decision making process for these employees, we ensured the availability of various means of support, such as frequently asked questions (FAQs) and web modeling tools. An internal senior human resources (HR) manager was dedicated to providing personalized counsel. Even though the company steered clear of offering personal financial advice, it made someone available to answer questions and help participants navigate key decision points to build trust and simplify the election process, leading to more satisfying experiences for participants.

The outcome

In the end, about 35% of the approximately 120 participants voluntarily accepted the early retirement offer. The client was thrilled with the overall outcome, and specifically the communications, which were well received by employees and contributed to an efficient and snag-free election process.