How to engage your deferred members

The long-term nature of this saving commitment often results in our view of retirement being filed in the back of our minds until a time it becomes relevant, and then potentially too late to take meaningful action.

A generalisation, perhaps, but with more than 3m new savers joining pension schemes through auto-enrolment to date, the need for engagement and support has never been greater.

The engagement challenge becomes even more acute when leaving employment and becoming a deferred member. Internal workplace communication channels are typically no longer available, and there is a real risk that contact is lost. 

With one in six people having no idea where their retirement savings are held, it is essential not to lose sight or contact with deferred members.

The retirement pots members have built up will have a personal value and importance, no matter how large or small the financial sum. Still, £3bn of pension assets remains unclaimed. 

The reality is members do not find managing their various retirement pots easy and will continue to lose touch with their previous employers.

The effort to reunite members with these hard-earned savings can be difficult and time-consuming, so what can we do to improve the situation and better engage with the 10m deferred members currently in occupational pension schemes?

• Explain options: Set out what members need to consider and can do with their retirement savings. Be clear on what their savings might provide in the future and how to address any shortfall.

• Update contact information: Members no longer have the same work email address or phone number, so update what is required to keep in touch.

• Focus on outcomes: Consider how this can be effectively communicated. Changes in circumstances may affect views on a member's ability to save, target retirement date, or investment risk appetite.

• Replace lost benefits: Do members still have the appropriate savings and protection coverage eg need for replacement life cover?

• Develop financial confidence: Members need to know their savings are being looked after. Help them feel in control with online resources.

• Be relevant: keep information flowing, particularly around different life stages and key impact events, such as scheme updates and Budget changes. Newsletters and seminars can be effective in getting the message across.

• Get personal: Consider personalisation in communication to keep recipients interested and appreciative that information shared is important to them as an individual. Offer choice in how and when they want to be contacted, facilitated by engaging e-based solutions.

• Be positive: Avoid terms such as ‘deferred’, ‘trivial’ or ‘small pots’, which may psychologically undermine the perceived value of what members have done to save. Any level of saving is important, so help members fully appreciate the benefits of what they have achieved.

• Keep it simple: Do not introduce barriers to engagement by adopting the extremes of minimal content or engaging in information overload.

• Follow good practice: The Pensions Regulator's Trustee Toolkit, the DC code and accompanying regulatory guidance give useful information to help trustees embed quality features into their DC scheme, including member communications. 

With a growing need for us all to take more responsibility for our retirement, communication is crucial to help us take a more active participation. This applies to all retirement savers, whether active members or not.

The bottom line is that although circumstances may change, a deferred member still has needs and aspirations – the same as they did when they were an active member. 

In ensuring deferred members remain connected to their retirement savings, we will go some way to help increase their chance of achieving good outcomes for the future. 

Paul Allen is a corporate proposition consultant at Zurich UK Life