British Coal's green turn on payslips to net £400,000 a year

Cost considerations mean schemes are increasingly opting for paperless communication strategies, but experts said they should carefully consider how any new mediums might impact the engagement of less technically literate members.

Pensioner members of the £8.64bn BCSSS will still be able to access monthly payslips through an online resource on the scheme’s website, and can request payslip details from its administrators.

The fund will still provide members with three payslips a year, detailing changes such as pension increases and tax code changes.

Whatever online vehicle you’ve got needs to be worth its salt

Karen Bolan, AHC

A BCSSS spokesman said: “The recent decision by BCSSS trustees to reduce the frequency and number of payslips we issue to members was driven by a desire to streamline and consolidate member communications.

“We’re confident that the move will improve the overall member experience, at the same time as delivering cost efficiencies.”

The £400,000 saving is relatively small in comparison with the overall fund size, but could still have a material impact on its administration costs and overall performance.

Chris Roberts, trustee representative at Dalriada Trustees, said a saving of this size could be used to fund an investment review.

“When the numbers are that high it’s very hard not to make that call,” he said.

Roberts estimated that around half of schemes have begun to reduce the amount of paper statements they produce, adding that the trend towards paperless communication looks set to continue.

Paper's still useful

While reducing paper usage brings obvious cost reductions, schemes may have to be careful not to alienate members who are reliant on paper-based information.

“One thing we do internally, and something we promote, is just sending out payslips when there’s a change,” said Roberts, citing similar examples to the changes still covered by BCSSS’s new strategy.

He said schemes could also implement an opt-in system, where paper communications are reduced by default but members who still want to receive them can choose to do so.

Another important consideration for schemes considering a move towards paperless communications is the quality of the online resource replacing the old system.

Karen Bolan, head of engagement at communications consultancy AHC, said that halting paper communications can be an effective nudge towards more comprehensive online member engagement, but added: “Whatever online vehicle you’ve got needs to be worth its salt.”

If done correctly, she said, online resources can encourage members to think about their wider pension provision and important scheme changes, even if they only access the resource to check something simple, such as payslips.

Analysis of an online resource created for Asda’s pension schemes by AHC showed that members spent an average of 3.5 minutes per visit on the site, suggesting that their activity is not limited to checking benefit statements.

Tackling the data threat

Embracing paperless communications can also help schemes embrace data protection, as benefits statements often contain personal information of great value to fraudsters.

A recent session at the Pensions and Lifetime Savings Association’s annual conference highlighted the risks posed to pension schemes by fraudsters, who now target victims via traditional methods and data systems.

But for Bolan, the increased level of monitoring available to online administrators means web-based communication remains the safest option. Schemes looking to tighten their security could add secondary layers of validation at the log-on stage, as seen in many personal banking systems.

“When you put something in the post the only thing you are certain of, that you can measure, is that you put it in the post,” she said.