(Click the title to read this post in full.)

GUEST BLOGGER: Claire Briscoe, Account Manager

Someone once said to me: “Working life is like a Mars Bar – ‘work, rest and play’. Work pays for your rest and play and it all rubs along nicely. The problem comes when you retire and life becomes ‘rest, rest and play’ – how will you cope financially with your extra leisure time?”

New research from Ipsos MORI looks at why many do not join company schemes. Citing apathy as the leading reason, it also identifies, among others, unclear and sometimes polarised employee views of retirement, and a perception that pensions are difficult to understand.

This highlights that companies have a duty to explain the urgent need for pension provision to employees in plain English. Communication has the power to overcome these barriers, playing a vital role in changing employee attitudes. Rather than positioning themselves as Big Brother, employers should view the next couple of years as an opportunity to educate and support employees so they are able to make empowered choices, instead of simply being automatically enrolled.

Effective communication during this period will help employees to see their pension as an attractive company benefit that they will want to take advantage of, rather than a ‘must-do’ mandate from the Government.

Here are some key points from the report along with some of our own practical tips:

No clear picture

* Many employees imagine they will spend less during retirement. Ask employees to consider what they spend on an average day off or during school holidays compared to a normal working day
* Cultivate personal but realistic visions of retirement and explain that your scheme caters for different lifestyle choices.

Apathy

* Research shows many workers skim-read pensions information and file it away for later. Keep it current, fresh, and pertinent to individual sections of the workforce. Express a sense of urgency but focus this on the personal aspirations of the individual, leaving the corporate propaganda out of it
* Just after holiday season is an optimum time to communicate with your workforce about their pension – the odds are they have enjoyed some time off but also have been reminded how expensive it can be…
* Too much emphasis on the negatives can trigger the ostrich effect! Rather than focusing on savings deficits, present a picture of how much can be achieved by starting now
* Make the joining process as simple, quick and easy as possible, so that there are no barriers to taking immediate action.

Difficult to understand and join

* Employees will be unwilling to sign up for something they don’t understand. Use a plain English approach and ensure technical information is presented in an accessible way with plenty of guidance
* Have a clear call to action – explain what employees need to do now to find out more or start the joining process
* Be clear about joining window dates.

If you do nothing else with your pension communication, think of the Mars Bar – help employees to consider what their retirement will look like, asking them how they will spend their ‘rest, rest and play’ time and how this will be financed. This places the employee at the centre of your strategy and is relevant to the entire workforce, it cannot fail to re-focus pensions communication.

Research source:
Understanding Why Some Employees Don’t Participate in Employer Pension Schemes, by Suzanne Hall and Wendy Floyd for Ipsos MORI (2009).

Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
ErrorHere