401(k) Call Centers Expect Surge in Inbound Calls Related to Fee Disclosure
by Debra Cox, Senior Vice President, Head, US Customer Contact Center - BMO Financial Group -
January 13, 2014
401(k) Call Centers Expect Surge in Inbound Calls Related to Fee Disclosure By Debra Cox, Senior Vice President, Head, US Customer Contact Center - BMO Financial Group
The US Department of Labor has given 401(k) retirement plan providers until the end of August 2012 to clearly disclose all fees paid by enrolled employees. For the first time since such plans were legislated into existence in 1986, plan participants will have accurate and complete fee information. This breakthrough will enable more than 50 million employees to understand exactly how much of a plan’s costs come out of their pockets. Not surprisingly, this will also present a challenge to most 401(k) call centers.
BMO Retirement Services has provided comprehensive fee information to its 401(k) clients for years. Therefore, they are already compliant with most Department of Labor fee disclosure guidelines. Although BMO is ahead of the industry curve, its 401(k) call center expects a surge in fee-related questions from participants in the second half of 2012. Many of the calls should be relatively straightforward, as participants seek to reconfirm that they are correctly calculating their fees.
From an infrastructure perspective, BMO is confident it is equipped to handle this spike in inbound volume. In fact, BMO has the only call center in the retirement services industry that operates 24 hours a day, seven days a week, 365 days a year. With 56 dedicated representatives, its team is large by industry standards. On an average day, the team fields about 650 calls from their more than 1,500 plans. The calls average about six minutes each. The team is fluent in English and Spanish and, with the help of AT&T’s Language Line Services, can communicate in an additional 150 languages.
One upside of having a large 401(k) team is that it provides the center with the capacity to handle calls at virtually any time. Indeed, 17% of the center’s 401(k) call volume comes between midnight and 6:00 a.m. Many of these callers work second and third shifts – an increasingly common occurrence – and can’t contact the center during “regular” business hours. The center also services employees who have left a company but still participate in the 401(k) plan. Like current employees, this constituency may exhibit considerable interest in fee disclosure.
A critical advantage BMO expects to enjoy as it prepares for the intricacies of responding to fee disclosure calls is that its personnel turnover is just 2% – well below the industry average of 25%. This precludes BMO from having to continually train new employees before August 2012. One reason turnover is so low is that representatives on the 401(k) desk have already demonstrated their commitment to the business by participating in a rigorous training progression model. This training consists of 10 weeks of classroom training and an incubator program in which each trainee is paired with a supervisor for a period of no less than three months. Before being considered for admission to the 401(k) team, each representative also must complete shifts in online and business banking. In addition, they are required to take three classes per year on legislative changes, new products and procedural changes.
Within the call center, the primary charge of BMO representatives is to help each plan participant better understand their retirement savings account. And while fee-related questions made up less than 1% of inbound calls in 2011, BMO is assuming this percentage will jump significantly in 2012. This has necessitated acquainting the 401(k) team with the nature of fee disclosure and anticipating the questions representatives may receive. It also has prompted the team to create an instant communication protocol to quickly share questions that may not have been anticipated. In turn, appropriate answers can be crafted.
Some of the more sensitive calls may be from participants who didn’t realize that fees have always been automatically deducted from their account — even though this is disclosed in material provided by employers. In extreme cases, some participants may express surprise and unhappiness, and it will be incumbent upon the center’s representatives to explain that it is a common practice for fees to be shared by the employer and participating employees.
Of the 219,441 total calls the BMO center logged last year, only 362 were escalated to another level. This suggests an exceptionally high rate of caller satisfaction, and it is BMO’s intent to ensure that fee disclosure calls meet with the same success. Fee disclosure is a positive event for the 401(k) industry and a plus for 401(k) participants. Rigorous preparation by BMO’s call center will help to ensure those employees’ questions and concerns are properly, accurately and promptly addressed.
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