PLSA Annual Conference 2016: Schneider Electric has overhauled its defined contribution engagement strategy, as research shows that members want solutions that enable them to make decisions and implement them easily.
Schemes are turning to technology in a bid to boost member engagement while helping employees decide on their retirement goals.
Recent research carried out by Aon Hewitt shows that millennials are twice as likely to seek advice online, while one in 10 people say nothing is stopping them from saving more; they just need to be given a “nudge”.
If we don’t do something to help our people save for retirement they won’t be able to retire
Jerry Gandhi, Schneider Electric
At the PLSA annual conference, Jerry Gandhi, pensions manager at UK & Ireland Schneider Electric, told delegates about the scheme’s new approach to communications.
Emphasis on engagement
In April this year, Schneider introduced a number of new tactics to help guide members through their retirement journey while encouraging greater engagement.
Gandhi said: “If we don’t do something to help our people save for retirement they won’t be able to retire.”
To tackle this issue, he said that Schneider had “built a brand new website” with “easy access” to the DC trust, which has about 2,358 active and 362 deferred members.
The website has been “segmenting people right from the beginning” so that the online messaging “engages at the right point, for the right reasons” and “respects diversity and needs”.
He highlighted the fact that even the way communications are worded has been adjusted by introducing language “people can connect with”.
Historically, Schneider’s pension scheme booklet had been “a weighty document”, said Gandhi. “We really felt the need to break it out into individual sections,” which can be downloaded onto electronic reading devices.
According to Gandhi, the main focus of this new approach is to take members on a journey by leading them through the processes of gearing up for retirement.
Breaking it down
A series of videos have also been introduced to take people through each stage of the retirement process and explain what is involved. People in the workforce “really are fearful of pensions”, said Gandhi. “So unless you can break it down into the basics, they don’t connect.”
Source: Aon Hewitt DC Member Survey 2016
Prior to 2014-15, the scheme had a number of different investment choices and “people didn’t know what to do”, said Gandhi.
Consequently, the scheme decided to “break it all down” online to make it clearer to members by showing three phases of saving for the future.
In terms of success, in the last quarter, 300 members have gone online and increased their contributions. During the same quarter, the website had more than 2,000 unique hits and more than 12,000 page views, according to Gandhi.
Seeing the full picture
Sophia Singleton, partner and head of DC consulting at Aon Hewitt, said the first hurdle is to help people set realistic targets.
“At the moment I don’t think people really know what it is they need to be saving for,” she said, adding that there needs to be guidance for younger generations in particular to prevent problems further down the line.
Singleton said many people do not know what to do with their pension and, according to an Aon Hewitt survey, 23 per cent of people aged 55-64 still do not know what they expect to do with their DC funds.
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Members can find it much easier to make decisions and implement them when they are provided with all the relevant information in one place, she said, so they can see the full picture.
Carol Young, head of group pensions at Royal Bank of Scotland and member of the PLSA’s DC Council, pointed out that members can also “really benefit from communicating with member-nominated trustees”.
Trustees often have “a passion for the subject”, she said, and as laypersons, can make a connection with employees in terms of emphasising the importance of retirement planning.
