Cheshire looks for cost saving with email alerts

The £2.9bn scheme plans to make more use of email alerts when it communicates details of the Local Government Pension Scheme reforms and the introduction of auto-enrolment to control costs.

Cheshire is the latest local authority scheme looking to make savings from reducing its paper communications. Stephan Van Arendsen, senior manager for corporate finance at Cheshire Pension Fund, said: “As there is a limited budget for communication, each year we’re trying to map out how we’re going to use the money in the most effective way.”

But Van Arendsen was unable to provide details of how much the scheme was likely to save.

To control costs, the fund is planning to implement an online email alert process and is considering making more effective use of social media. In the third quarter of 2012, the fund website will allow members to sign up to receive automated email alerts. Every time there is an update on the website, members will receive an email with a hyperlink to the latest pension information and how it affects members.

Schemes that are able to effectively use electronic communication and social media can make substantial savings and create new channels to engage with members.

Last month schemeXpert.com reported on the £2.7bn Avon Pension Fund, which expected to save £150,000 a year by switching to paperless communications. More than £90,000 was expected to be saved in postage costs alone.

Cheshire’s approach

The pace of the change affecting Cheshire will be significant and the new strategy aims to make sure stakeholders, employers and members are aware and understand them.

We want to give our members as much information as possible for them to make the right decisions

Stephan Van Arendsen, Cheshire

Van Arendsen emphasised the importance of the two-way communication, saying a formal feedback section would be included within each piece of correspondence.

This was to ensure each individual employer could provide feedback or challenge the fund.

The communication strategy has been built to communicate a number of elements: administration changes, investment activities, funding levels and cash flows. Van Arendsen said the strategy took into account not only what the fund will do in the short term but also what it will do up to and beyond 2014 when the new local government structure come in. Members will receive a lot more information, which will allow them to make better-informed decisions about their pension provision. “We want to give our members as much information as possible for them to make the right decisions,” added Van Arendsen. Communication with employers has been primarily through annual employer meetings and training sessions, whereas communication with scheme members has been conducted through written documentation and a website. “We’ve sent everybody emails to say this is the way we’ve done it, this is how we’ve done it, and hopefully they will review it and understand what it means,” Van Arendsen said. Although the Cheshire Pension Fund would like to move away from paper, in the short-to-medium term it plans to keep both forms of communication. Van Arendsen said schemes should be aware that one size does not fit all. Some members would appreciate paper communication whereas others were used to electronic forms of communication, he added.

Use of social media

Guy Woodward, communication consultant at Mercer, said social media opened up additional channels of communication, such as embedding video clips, which could be a very powerful tool.

Members can receive answers quickly and more directly than [more traditional] communications allow

Lyndsay Toal, Capita Hartshead

“Use of social media is not about setting up a Facebook account, it’s about learning from the techniques of social networking,” said Woodward. He added that if there were significant changes in the fund, sending out email alerts was effective at getting information out very quickly if they contained hyperlinks to the updated information.

Lyndsay Toal, communications consultant at Capita Hartshead, said one of the most important factors in switching to email and introducing social media was to increase member interaction with their pension. “Members can receive answers quickly and more directly than [more traditional] communications allow,” Toal said.