What do you mean he’s boiling “insert mystery ingredient here”? You can’t do that!
Recently my 14 year old daughter and I were watching an episode of Chopped. For any of you that are unfamiliar with this Food Network mega hit, just Google it for some fun entertainment-especially if you are a foodie. While watching it, one of the contestants did something that was so distasteful to the judges that one of them yelled out,” What is he doing?!? You can’t do that!!!!” This caused an immediate hysterical laughing fit between my daughter and I followed by several days of exclaiming “What are you doing? You can’t do that!” over the most mundane of things. Ah life, we laugh where we can.
So why did the above thought come to mind as I was thinking about my first blog centering around participant communications during a Merger and/or Acquisition? Well I guess because sometimes even with all our training and preparations we may find ourselves in a place we never expected. However, by creating and following a communication plan you can minimize the potential for unexpected and unintended issues popping up.
Here’s what I mean:
Let’s say you have completed your due diligence and worked through all the legal requirements as part of your Merger process. You have set a timeline and as you approach the end result all of the time and energy were worth it, you are feeling great.You know this change will be fantastic for everyone! Then a few employees hear about some upcoming changes in regards to elective deferral contributions and the match they are getting. They react by discussing it with their co-workers rather than with you or your benefits folks and before you know it you have a bit of a monster on your hands, what we call in the industry – MORALE ISSUES.
While you know you have enhanced the match, all your participants see is they used to get 100% match on the contributions they put into the plan and now they have to defer more salary to get that same amount. They don’t understand the concept of stretching the match and in an instant all of your hard work evaporates and you find yourself reacting and not feeling all that good about it.
So I ask, what could you have done proactively to help diffuse your morale issue? I believe a thoughtfully drafted and implemented communication plan could have helped immensely by keeping everyone well informed. It can take the mystery out of your transaction and take many forms. Here are some examples to consider:
- A participant newsletter outlining what changes are to come and when.
- Educational meetings, getting in the trenches to identify questions people have. Answer them!
- Sample calculations of match (or other) enhancements to your plan demonstrating how it can impact participants over time.
- Demonstrate to your participants how your merger/acquisition can help them in preparing for the ultimate goal of being prepared for retirement.
Communication is always a good idea, even if it’s not a requirement under law. As you navigate through your transaction consider creating a communication plan. I believe you will be happy you did.
When thoughtfully drafted and executed they can be a great resource for easing negative views and eliminating morale problems which have a tendency to surface when folks make uninformed assumptions. So take out the mystery – be ready, be proactive and execute! Then when one employee mentions to another they heard some things were changing as a result of your merger and/or acquisition they are more apt to speak up and say “Yes, and did you know that if you increase your contribution to the plan you will get more match?” – WINNING!
Now if I could only remember what that mystery ingredient was….
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392