New York Life Retirement Plan Services (NYLRPS), a division of New York Life Investment Management, has introduced a program to help the firm and its clients understand and predict employee-planning behavior. Using cluster analysis, New York Life is able to categorize participants into six segments that are derived from a number of perspectives, including: attitudinal characteristics–whether the participant wishes to self-direct their account or delegate account management decisions; behavioral characteristics–how a participant wishes to manage their account, whether through direct and personalized contact with New York Life or self-service via the Web site; investment characteristics–whether the participant invests the majority of assets in the plan's default fund or takes on risk in exchange for higher returns in international or growth investments; and demographic characteristics.

Using this information, New York Life can work with employers to provide customized tools that fit the needs of the plan participants. For example, one segment consists of lower paid employees who are juggling financial priorities; this segment requires basic 401(k) education and do-it-yourself tools like managed accounts. Another segment might be focused on retirement planning at the lowest possible age, in which case plan sponsors should offer more sophisticated Web tools and investment advice.

The advanced segmentation process, which employs methods used by retailers to predict what customers are likely to buy based on past purchases, actively learns about each participant to help the plan sponsor adjust its plan to those needs. New York Life uses similar behavioral and preference information, along with plan and demographic data, to create and deliver personalized participant educational programs.

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