More than 60% of organisations do not have a communication policy in place for their defined contribution (DC) pension schemes.
According to Mercer’s latest DC survey, which analyses the DC pension provision of 354 UK organisations, more than two-thirds (68%) of survey participants rated limited member understanding as one of the greatest challenges currently faced by DC plans, and nearly 90% want to improve member education and understanding in the next 12 – 24 months.
Being valued by employees is rated among the top success factors for a scheme (78%), yet only 16% believe they have been successful in ensuring this is achieved.
The survey also found 34% of sponsors have no formal objectives for their DC plan and 46% have no defined success measures.
Trevor Rutter, a senior consultant in Mercer’s workforce communications business, said: “The findings highlight the real difficulties employers face when running a DC scheme.
“Employers know what success looks like yet there is a dichotomy between employers’ objectives for their plan and reality. Despite realising communication is central to a successful DC scheme, companies seem to be struggling with actions to get this going.
“In many cases, to maximise the benefits of a DC plan’s communication, we just need to make use of information we already have. Data on member choices and behaviours can be used to provide communication that is timely and targeted to suit the membership demographics.