Shell becomes latest scheme to push electronic comms

Switching to electronic communication allows pension schemes to generate cost savings while building up data on their members, meaning future communication can be increasingly segmented and targeted to a member’s profile.

People are much more willing to give email information. In the past they didn’t want to give too much away

Karen Bolan, AHC

For example, IBM’s scheme got 5,200 sign-ups from active members to its online pensions management portal MyPension in 2014

Savings can be small

However, the savings generated from going paperless can be modest in comparison to those yielded by changes to investment arrangements.

Last year the West Midland Pension Fund saved £40,000 by November, following a shift to electronic communication in April. In comparison, the fund has saved £25m annually through efforts to reduce investment costs.

The move by Shell’s pension fund is motivated by more than just cost, according to the company. A spokesperson said as well as making savings, factors such as how quickly communications are received, how engaging they are, and their impact on the environment all played a role.

“The Shell pension scheme’s move towards electronic communications has many benefits for members, enabling more timely communications and more interactive and interesting content than is currently possible with paper. It should reduce the pension fund’s costs and, just as importantly, be more environmentally friendly.”

Choice of letters and email

The spokesperson added that members would be given the option to continue receiving paper communications if they preferred.

While reiterating members’ rights to continue receiving letters, an update in the scheme’s member newsletter said the change would “make our interactions with you more engaging and timely”.

The newsletter continued: “We also expect to be able to offer new facilities so that you can keep us better informed about your circumstances and any issues that affect your pension.”

In an additional measure, the company will stop sending an annual letter from the UK country chair to pensioners and deferred members from next year. The letter will instead appear in the Shell Pensioners Association magazine.

E-comms picks up speed

The shift towards electronic communication has been happening across the industry for years, but Daniel Taylor, head of administration services at consultancy Premier Pensions, said adoption has been accelerating in recent months.

He said recent events were driving this trend. “The economic situation has turned sponsors onto it as a means of reducing operational cost,” he said.

This is not confined to emails, he added. Many employers “are looking at a more comprehensive digital platform for members, not just email but something that covers all aspects of modelling benefits, filling in forms, transacting”.

The strategy seems to be paying off, he said, as the shift to online is being met with increased engagement from members. “People want a lot more from their pension,” said Taylor.

At ease online

Karen Bolan, head of engagement at communication consultancy AHC, said schemes are tending towards gathering data on members in an effort to encourage increased engagement.

“With pensions being so hard to get on the average member’s agenda, any cut-through you can get, any channels you can use are really helpful,” she said.

She added that this is helped by people being increasingly comfortable with smartphones, as members are now often happy to view financial information on their mobiles.

“People are much more willing to give [email information]. In the past they didn’t want to give too much away. We do now live in a digital age,” Bolan said.

Bolan acknowledged cost saving is a major factor in electronic communication’s appeal to schemes, but added they are also drawn to the opportunity to offer short, simple messages as well as depth.

“You can make them very simple, but give [members] the opportunity to click through for additional information.”