How to close your scheme's comms gap

Additionally, 44 per cent of respondents to Scottish Widow's workplace pension report said they did not know how much their employer contributes to their pension.

However, the number of employees finding out about auto-enrolment through their employers is on the rise, increasing to 26 per cent this year from 16 per cent last year.

This is “likely due to the commencement of the rollout of the legislation and employers themselves becoming more knowledgeable”, the report stated.

Saq Hussain, pensions director at PwC, said as the reform has taken hold he has seen an increase in employers developing a communication strategy to help employees get the best value from their scheme.

This has been to encourage more pension scheme members in, "or those already in the scheme to increase their contributions,” he said.

Often employers have been using information given by pension providers to fulfil their statutory communication obligations.

Companies have also delivered warm-up correspondence to employees so that it is not a complete shock when they start receiving larger communications, said Lisa McEneny, consultant at Aon Hewitt.

This can answer questions on what a pension plan is, how it works and how employees will benefit.

“People generally are not overly engaged with their pension scheme,” McEneny said. “It’s a really difficult subject for Joe Bloggs to get his head around, so [communications] help them understand how they influence their savings.”

Effective communication

The research showed the average monthly amount respondents said they would be prepared to save into their workplace pension is £51, in contrast to £76 last year.

You do need to segment your workforce and do different things for different groups

More needs to be done to help employees think about whether their contributions are enough for them to be able to retire at the age they would like and whether therefore they are making the right level of savings, Hussain said.

“The risk for employers is that in 15-20 years time a lot of workers will not be in a position to retire,” he added.

Employers will need to think about what impact this could have on their business, said Hussain.

Increasingly, employers are thinking about their contributions strategy. Since in many cases employers cannot afford to increase their contributions, a benefit of educating employees on their saving obligations is that it may encourage them to contribute more to their pension pot.

Another benefit of better education about auto-enrolment is that it can help avoid confusion between defined benefit and defined contribution schemes for employees, McEneny said.

Implementing your comms programme

Before designing correspondence, employers should think about what they are trying to achieve – increasing scheme membership, reducing the number of people opting out or increasing employee contributions.

The method by which an employer delivers pensions information depends on the everyday work life of different employees, according to Hussain.

Seventy per cent of employers tend to use face-to-face meetings to communicate auto-enrolment, yet only 30 per cent of employees surveyed said this was their preferred method of receiving information about their scheme, according to Scottish Widows (see box).  

“You do need to segment your workforce and do different things for different groups,” he said.

For companies delivering pension information to head office this could mean employing an email campaign.

However “for employees working onsite every day, you probably would not do an email campaign because they do not have access to a [computer], but have presentations supported by posters,” he added.