With the introduction of automatic enrolment in 2012, many employers have now been required to join certain employees into a workplace pension scheme and meet minimum employer contribution requirements for over a decade. Given that this requires a financial outlay from employers to remain compliant, an important question for employers should be: how can they maximise their return on that investment?
While achieving compliance with automatic enrolment legislation should be a priority for employers, do employees attach any value to it? The answer to this significantly depends on the level of engagement that employees have with their workplace pension scheme. Employees who have a clear understanding of their pension, how much the employer contributes and how it can benefit them in retirement are much more likely to view their pension as a valuable employee benefit, therefore boosting employee retention and satisfaction.
We have therefore outlined below some useful tips on how employers can boost employee engagement with their workplace pension.
Spread the word
An obvious starting point is to have clear and efficient communication channels so employees can easily access information regarding their workplace pension. Some good examples are providing access to an online benefits portal that can house all the relevant information regarding the pension – your pension provider/pension advisers can usually provide some useful materials to assist with this. Providing financial education sessions can also help raise awareness by highlighting how retirement planning fits into a wider financial plan for all employees – financial education has taken on even more importance in recent years due to the current cost of living challenges faced by employees.
Keep it topical
Raising awareness regarding your workplace pension can be significantly boosted by ensuring employees are kept abreast of any topical issues in relation to retirement planning. For example, changes to pension contribution allowances from April 2023 made the headlines. A conveniently timed reminder about the benefits of the workplace pension can maximise the impact, as it is likely to be at the forefront of employees’ minds at this point.
Make it relevant
It is important when you are providing communications to employees regarding the workplace pension that you make sure it is relevant to all the workforce and accessible via multiple communication channels to ensure all employees are acquiring the information. For example, some employees may prefer to speak to someone regarding their pension, whereas others may prefer to make use of the online planning tools available via the pension provider.
As another example, tailoring financial education sessions to an employee’s career stage helps keep employees interested. For example, those earlier in their career may be more attentive if the discussion around the pension highlights how they can control where their fund is invested, especially given the increased focus on environment, social and corporate governance (ESG) options. In contrast, later stage employees are likely to be more focused on understanding their options at retirement.
Summary
Ultimately, meeting the automatic enrolment legislation is extremely important; however, without efforts to raise awareness among employees of the benefits of the workplace pension, they may not attach value to it. Mattioli Woods can assist employers in ensuring their workplace pension continues to deliver good member outcomes while also supporting them with a tailored, multi-channel communication strategy to ensure all employees are being reached and making the most of their retirement savings. This in turn can lead to a greater return on investment from the employer perspective.
Content correct at the time of writing (January 2024).
