Local government pension schemes have decided to use ‘account’ rather than Care when communicating their reformed scheme structure to avoid negative associations.
Local authority schemes are in the midst of implementing both auto-enrolment and LGPS reforms which is creating a challenge when corresponding with members, and are using a variety of media to get the message across.
Jeff Houston, head of pensions at the Local Government Association, said at Thursday's summit that communicating the shift from final salary to career average will be an interesting challenge.
“We are not going to use the phrase Care,” he said. When using the term – which stands for career average revalued earnings – in conjunction with retirement most people think of care homes rather than pensions, he added.
The association will instead refer to the structural change as an 'account'. "It works like a bank account – you put money in, the [employer] puts some money in and you get some money at the end of the year,” said Houston.
Communicating change
Council schemes are also implementing auto-enrolment as well the LGPS reforms. Trying to get people into the scheme and dealing with reforms has been a "massive operation" for the Norfolk Pension Fund, its head Nicola Mark told delegates.
“Very often people think we operate in a bubble and are protected from all the other issues [involved in] running a private sector fund.
“But I think we have more issues because we have all the same issues but we always have the threat of political intervention in one way or another,” she said.
The changes have also led to confusion among members. “One of things you have to realise is that people do not differentiate. So they see auto-enrolment and reforms to the LGPS as all one thing,” said Houston. “You have to talk about pensions in the round.”
The use of multiple media was recommended. LGA are looking at all the different media we can use – including websites, videos, social media and print. “Because not one way will do it… people want very simple messages,” he said.
The Norfolk scheme is also keeping in mind the level of literacy of council employees. “It is likely that in the demographic of the type of workforce I have in Norfolk – about 70,000 or 80,000 – a third will have literacy issues.”
