The BAA Pension Scheme’s digital push on communications has led to virtually the entire membership opting to switch to electronic information.
Significant numbers of pension schemes will invest in new pensions technology over the next three years, with 61 per cent expecting to invest in tools that give members greater online access to their pensions, according to PwC’s 2018 Pensions Technology Survey.
It is part of a general push by the business to be paperless
Chris Parrott, Heathrow Airport Holdings
The BAA Pension Scheme's summer 2018 newsletter from the trustees stated that “less than 1 per cent of our total membership have requested to continue to receive paper-based communications”.
A DB ‘catch-up’ exercise
As a defined benefit scheme with 3,366 active members, 7,148 pensioners, 1,753 dependants and 5,127 deferred members, unusually the BAA Pension Scheme is still open to future accruals.
Chris Parrott, head of pensions at Heathrow Airport Holdings, the sponsoring employer, said the digital move “is part of a general push by the business to be paperless”.
A number of the company’s communications are delivered electronically through an intranet, and “we have self-service on our pay and benefits, annual leave”, said Parrott, adding that “it was inevitable that our pension communications should follow suit”.
When it comes to communications, Parrott noted that communications for defined contribution members are already predominantly online.
With the DB scheme, “it is a bit of catch-up exercise”, he said. “We launched a website two years ago and we always recognised it was going to take a bit of time for people to get used to the fact this was the way things were going,” Parrott noted.
He added: “Our analysis shows that just over half our members (our current and previous employees) have accessed it and not just landed on the home page or looked for contact details, but it is very much a work in progress.”
Eventually, the website will push members onto portals to the relevant retirement providers and administrators.
Member comms crucial in run-up to buy-in
One of the key worries of digital services is the vulnerability to bugs and hacks, but Parrott emphasised: “We take cyber security very seriously. We do a penetration test on a regular basis at least annually, where we get cyber security people to try to access details.”
Member communications were also very important leading up to the recent derisking exercise: a £325m pensioner buy-in earlier this year with Legal & General.
In the summer 2017 newsletter, “we included just a very simple return card asking: ‘What’s your name? What’s your date of birth? Are you married? Yes or no? Are you living with someone? Yes or no?’ It was a very simple way of updating our records, which fed into the process we used for our pensioner buy-in”, Parrott noted.
As with many pension schemes, getting in touch with deferred members can be problematic, but Parrott said a number of former employees work at other airports around the country who are part of the airport community. “We still retain the BAA name for our pension, so it is very easy for people to get in touch,” he said.
The pension scheme is served both by an-house communications team and an external communications company.
Surprisingly, Simon Grover, a lead writer at communications consultancy Quietroom, said many pension schemes do still use paper, “but that should be a deliberate choice rather than because that’s all they can manage”.
He said: “In a digital world, paper communications can really stand out. If you want people to read your stuff, that is an important consideration. But paper comms are no good if they are long, technical and dull to look at.”
Pensions must move in line with tech advances
Looking at the digital perspective, “technology is moving fast, much faster than ever before”, says Jim Christopher, principal and head of digital communications at Mercer.
He said: “If we’re communicating more and more using our mobiles, and using social media tools such as Instagram, Facebook, WhatsApp and more outside of work, then why can’t the experiences we have inside the work environment be the same?”
Christopher added: “We see these applications continuing to be discussed when setting communication plans, as well as embracing other technologies that aren’t used quite as much inside the workplace, such as ‘augmented reality’, ‘virtual reality’ and chatbots.”
Industry must innovate to build on pension comms progress
There is still so much more that needs to be done by providers, consultants and employers if the initiative is to have any real impact
But Grover said trends are not something most pension schemes need to obsess about.
“Much of what our industry produces would be more at home in the last century – or the one before – let alone on trend today,” he said.
Grover added that the plus side of that is, “with a little effort we can make big improvements”.
Indeed, Banafsheh Ghafoori, senior communications consultant at LikeMinds, said many schemes still use paper-based communications as email addresses can be difficult to harvest given recent General Data Protection Regulation changes. Individuals are also reluctant to provide an email address when they do not see the benefit.
But what really works? Grover says: “There’s no single answer to this, because it depends on the audience. The way to find this out is to ask them.”
