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David Parfett

Aon

Senior Consultant

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How to get your employees excited about pensions

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Despite the government’s recent pensions reforms, including the introduction of auto-enrolment and the 2014 Budget changes to abolish annuities, 41% of employees still don’t understand retirement planning according to a recent report, Flexibility in Retirement – planning for change.

The report, authored by former government advisor Ros Altmann, found that just 24% of working adults said they intended to begin making pension contributions or increase their existing contributions.

It’s certainly not lack of information on pensions that’s the issue here. Too often it’s communicated in a way that simply turns people off instead of switching them on. But it doesn’t need to be this way.

Employers have a great opportunity to engage with employees on a regular basis, helping them to make informed decisions about their financial futures. But to be successful, it needs to be done in a way that cuts through the apathy that exists around pensions and carefully packaged so that it allows an individual’s particular circumstances to be taken into account.

So what practical steps can employers take to turn apathy into something positive, engaging people in saving for their own future?

Start with a pension review  

Is the existing pension fit for purpose, does it offer the best possible deal for its members? Are there other alternatives that may offer a better solution to your particular business? This is an important first step in creating a compelling proposition for your employees.

Form a best-practice governance committee

Often overlooked but vitally important is a robust governance structure and process. This demonstrates to your employees that you are working on their behalf to get the best possible outcomes and service for them when it comes to managing their savings.

Get creative and make sure it’s personal

Just because so much of the existing communications on financial benefits is boring, it doesn’t mean your campaign has to be. If you want people to ‘get’ the importance of retirement planning, you need to develop a range of exciting and interactive communications which make pensions ‘fun’ and at the same time meaningful to them personally.

It’s also about being proactive in pushing communications forward for the good of your employees, and creating a culture where individuals feel they own their benefits. Some communications channels that we’ve developed with clients, and that have worked particularly well, include:

  • Creative marketing collateral including posters, bunting and branded sweets launched at an interactive kick-off event
  • ‘Know-how’ building sessions to train line managers and HR to support employees
  • The appointment of ‘pension champions’ throughout the business
  • Webinars to offer insights into the benefits of retirement planning and how it can impact on employees’ personal situations
  • Drop-in ‘clinics’ and one-to-one advisory sessions for employees
  • An effective cascading communications process to ensure correct messages reach all employees.

Use the latest technology

This is the key to engaging the X and Y generations in financial planning. It’s about providing them with the tools and know-how in a way that they understand and can identify with. It’s also about finding innovative ways to help employees make an emotional link with their pension, by using videos and interactive tools which enable them to model themselves in their future and see their future financial self.

The use of animated avatars, for example, can help employees see if they are on track to achieve their income in retirement. As they make different retirement choices, the avatars move along a target line so that they can see what difference the changes could make to their retirement pot. Using technology in this way helps the employee to easily understand how their current choices impact retirement income or lump sum amounts.

There is an immediate and enormous opportunity for employers to make a real difference to the lives of their employees. It’s about giving them the knowledge and support they need to make informed choices about their financial futures.

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David Parfett

Senior Consultant

Read more from David Parfett
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