Selex empowers members on AVCs with website add-on

Many schemes have allowed members to manage their investment options online, but experts have said planning and promotion is needed to have a meaningful effect on engagement.

The software now permits members of the defence company's £508m defined benefit scheme and £5m defined contribution scheme to access online their additional voluntary contributions and a hybrid DB-DC section called 100+.

Around 600 members have a 100+ retirement account and between 200 and 250 have money-purchase AVCs, said Mike Nixon, head of pensions at scheme sponsor Finmeccanica.

Members can also request investment switches using the software, with eight different funds on offer alongside the default.

Nixon said the aim of the changes was to make pension information more accessible to members and “to encourage members to engage with their pension”.

The scheme sent out written communications to accompany the enhancements in the hope of driving more engagement.

“We sent out letters to members who haven’t enrolled, inviting them to enrol,” said Rachael Skuse, pensions manager for the scheme. “I suspect we’ll see [that] more people have.”

Increasing participation

Engaging with members over specific aspects of their pension can be an effective way to increase their engagement with the scheme as a whole, experts said.

“Typically, when salary sacrifice or AVCs are involved there’s an annual window for members to change contributions,” said Karen Partridge, chief business development officer at communications consultancy AHC.

“That window presents opportunity to engage members on the whole pension piece, contribution level or how they’ve allocated their pension,” she said.

Gary Smith, head of DC consulting at Capita Employee Benefits, said too few schemes were using member information to make software relevant, personal and timely to their members.

“There are very different standards out there, very few are really trying to harness the technology to deliver a personalised experience,” he said.

Smith suggested actively messaging members if, for example, their pot fell by more than 2 per cent.

“You shouldn’t engage with the features of the fund,” he said. “Engage with the benefit. Simplify the options.”

Changes to the software come as part of a larger change to the scheme’s AVC plan, Nixon said, with further changes being explored for the future.

Last July, the scheme started allowing members to pay AVCs through salary sacrifice as a way of reducing their tax burden.

Selex previously used Standard Life to provide AVCs and funds, which required members to go to the Standard Life website to view them. In September it switched provider to Skandia.