Member engagement and communications

Many people only become engaged with pensions once it’s too late for them to materially affect the level of benefits they can expect to receive.

As a consequence:

• the scheme, which is likely to be a significant cost for the employer, will not be appreciated as much as it perhaps should be; and 
• members may make poor decisions, e.g. they may choose an inadequate contribution level and/or inappropriate investment options.

Employers and trustees will wish to avoid these outcomes and therefore may look to increase engagement.  

We believe that trustees should take time to consider and agree their communication strategy and the steps and time frame required to reach their goal. The approach taken will often need to evolve over time taking account of available resource. It should be remembered that investment in good quality communication can help to deliver projects and meet strategic goals, such as de-risking and buyout exercises.

Trustees also need to determine the balance between face-to-face, electronic/web based and paper communications and the respective cost and impact. Could, for example, the traditional hard copy newsletter be more appealing and interactive online?

Some steps that may help to boost engagement include:

• employee education
• meetings for new joiners
• picking the right communication style and medium
• newsletters
• periodic face-to-face meetings
• video or telephone conference town hall meetings
• focus groups or forums to ask for members’ views
• for larger schemes, a member panel
• a member website or portal or other inventive use of IT
• expanding the scope of existing websites, perhaps allowing more member functionality
• member presentations particularly when members have decisions to make (e.g. investment or benefit options)

Most of these come with an associated cost, some of which are significant. However, that additional communication effort can support members having better retirement outcomes - hopefully the aim of all trustees and employers offering pension schemes.

Trustees are legally required to provide certain information to members within certain timescales. The various obligations are generally referred to as disclosure requirements. In practice trustees are likely to delegate compliance with the disclosure requirements to their advisers, although the trustees will retain overall responsibility. Trustees must therefore ensure that any such delegations are clear and that they receive reports to enable them to confirm any disclosure deadlines are being met. The disclosure requirements for DC schemes have increased over time and some information has to be published on a publicly available website.

Some members may have particular communication needs – for example they may need to receive information printed using Braille.