Pensions: Is your best and most costly employee benefit your least appreciated?

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The government’s recent review of auto-enrolment found that 12 million workers are not placing enough importance on saving for their pensions. When it comes to engagement analysis, the government’s review was particularly enlightening, offering guidance covering ways in which employers can refocus pension engagement strategies to encourage a higher level of adoption and lower level of drop out.

This is especially important, as merely enrolling in a pension scheme far from guarantees the best pension plan. Only via active engagement can individuals ensure they have the plan that is best suited to them.

In the coming years, there is likely to be much more general awareness of pensions and their importance, as well as the need to take personal responsibility. As a result, any company that handles this well is likely to have greater employee satisfaction, which in turn supports recruitment and retention plans. In short, successful engagement not only benefits employees, but also boosts a business’s long-term prospects too.

How to generate interest

Piquing interest is the first, most important step you can take when engaging employees. You need to help dispel the myth that pensions are not only boring, but too complex to understand.  This is where your creative juices can really flow.

One example is MyCSP’s #pensionplaylist campaign where compelling, eye catching imagery and music create a point of reference wholly different to what most people expect when attending a talk on pensions. It also drives audience desire to know more with the use of strong imagery and catchy straplines, without focusing immediately on the ‘P’ word.

When creating literature on pensions, it pays to make it visually appealing and easy to understand. Bright colours, contemporary imagery and good design all play their part. Information should be presented in short, digestible chunks, mixed up with easily understandable graphics that both support and enhance the points you are making.    

How to build engagement

Once interest has been piqued, the challenge is to effectively engage employees.

Relevance is key. A group of people within five years of retirement will have very different requirements, concerns and questions to those at the start of their careers.

By far, the best way to do this is in a practical sense. This could be done digitally via social media, videos, your website or webinars. But when it comes to initial engagement, nothing beats face to face. If quantifying, we find face-to-face interaction 100% effective, webinars 75% effective and phone 65% effective.   

How to avoid ‘technobabble’

Sipp, MVR, transfer values, allocation rates, AVCs, annuities – these are just a few of the commonly used terms within the pension industry. But open your communication using words such as these and you may as well be speaking in another language. Replace complicated jargon (or technobabble as we’ve heard it called) with language that people can understand. Using a more tabloid style of writing can work well.

How to make it relevant

Relevance is key. A group of people within five years of retirement will have very different requirements, concerns and questions to those at the start of their careers. A good way to engage people is via case studies, enabling individuals to relate to real situations that mirror their own.  

For example, individuals approaching retirement are more likely to want to know about how to claim their pensions, and what other benefits may be available. Others may want to know about partial retirement, and those with young children may be more concerned about who will look after their family should they unexpectedly die. Depending on age and circumstances, everyone’s priorities will be different, and information should be targeted accordingly.

If we are to dispel the myth that pensions are both frightening and boring, thinking laterally about ways to convey essential information can pay huge dividends.

From the mid-2020s, the government plans to lower the age of automatic enrolment from 22 years old to 18 years old, which they estimate will mean an additional 0.9 million people joining workplace pension schemes. This will also mean that tailoring messaging for the younger generation is set to become increasingly important.

In addition, this offers an ideal opportunity to shift the culture around pensions: the AE review’s findings highlighted the fact that younger age groups tend to learn more easily, and the opportunity this presents in terms of the role in transforming the culture around pensions over time. If the younger generation successfully engages with pensions, then over time, as they age, new social norms will be created.

How to engage the gatekeeper

A frequent issue when it comes to pension engagement is that those disseminating the information – the gatekeepers – may not understand it themselves. This is entirely understandable for SMEs, which don’t necessarily have staff with the capacity to fully understand the range of pension schemes and changing legislation surrounding auto-enrolment, let alone have time to devise an engagement strategy.  Once the hard work is done demystifying the pension process, continued engagement becomes considerably easier.

Highlighting the business benefits of effective communication on workplace pension schemes can help buy in support from those at the most senior level.

How to keep up the good work

Pension engagement isn’t a one-off event. For it to be truly successful, there needs to be a continuous engagement plan. Utilise events throughout the year – whether they relate to individuals (birthdays, employment milestones), the business, or the national calendar – as reasons to re-engage with staff.

And remember to mix it up. Communication could centre around changing legislation concerning auto-enrolment, or Winnie-The-Pooh’s birthday (which first appeared on the printed page in 1926). Aged 91 this year, what might his pension be worth?

This last point may seem flippant, but in fact it’s perhaps the most important point of all.  Because if we are to dispel the myth that pensions are both frightening and boring, thinking laterally about ways to convey essential information can pay huge dividends, both to your employees and to your business as a whole.

About Laura Bowler

Laura Bowler

Laura Bowler is head of Training and Support Services and leads the team of pension experts who deliver training and consultancy services through [email protected]

Laura has deep expertise in all aspects of pension administration, for Defined Benefit and Defined Contribution schemes, built on 20 years industry experience. She’s delivered valued pensions training services to public and private sector organisations, satisfying the needs of clients from ranging from smaller employers to FTSE 100 companies and the largest Government Departments.

[email protected] is an established team of pension professionals with expertise in all aspects of pension administration, process design and project management, built on a wide range of experience across public and private sector schemes.

We help employers to understand and meet their pension scheme obligations through training, consultancy and support. We provide information and engagement sessions for members covering a wide range of subjects from pension scheme overviews, understanding and calculating pension benefits and the options at retirement. We understand the world of pensions can be complicated; we make it simple for trustees, scheme managers, employers and members alike. 

We measure our success by our clients’ satisfaction and we’ve been delighted to receive positive testimony from employers and members.

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