If you read nothing else, read this …
- When trying to push the auto-enrolment message home to a younger audience, the trick is to avoid jargon.
- Employers must structure their communications according to the characteristics and needs of their workforce.
The pension reforms are being publicised nationally, but employers must ensure their own workforce receives the right messages, says Nick Martindale
Effective communication will play a pivotal role for employers implementing auto-enrolment, and the key is to start as early as possible, particularly as the issue gets more media coverage.
James Kirkland, head of pensions, benefits and recognition at Telefonica, says: “The cat is out of the bag already. Staff are asking why they are being forced into this pension without getting any more pay. We need to get the communications out there almost before we are ready with the infrastructure.”
Tim Middleton, technical consultant at the Pensions Management Institute, says employers may find the publicity campaign already launched by the Department for Work and Pensions helpful because it will show staff that auto-enrolment is a national, government-backed initiative.
“People need to understand why the government believes it is important that they save into pension schemes and how it is going to affect them,” he says.
“It is important that they understand they will be enrolled automatically rather than through their own volition, because that is a real departure from anything we have done previously in this country.”
Employers will have to structure their own campaigns according to the characteristics of their workforce. Ian Hodson, reward and benefits manager at the University of Lincoln, says: “What auto-enrolment means for a 21-year-old intern is different to what it means to someone [aged] 55. Employers need a clear picture of their demographics to know what messages to give to which sections of the workforce.”
When targeting a younger audience, the trick is to avoid jargon, even words such as pension or auto-enrolment, says Kirkland. “We are running ‘maximise your money’ sessions to coach people into being better with their money and out of that auto-enrolment should fall. The other approach is to say ‘we are going to start taking money out of your pay and it is better that you come and find out what it is about’.”
Rosemary Mounce, group pensions manager at Arup, says the firm will emphasise the positives. “Our big thing is not so much what comes out of the employee’s pay, but the fact that the employer puts something in on top,” she says.
One area that needs care is communication of the opt-out process, because employers cannot be seen to encourage staff to leave the scheme.
Communication around opting out will also be important from an administration perspective.
Jamie Fiveash, director of customer solutions at B&CE, provider of The People’s Pension, says: “With very low earners, you are talking about very small amounts of money and sometimes inertia rules. Simple, clear messages at the right time are critical for this type of worker.
“We will struggle for the first few years when people have only got a few hundred pounds in there and can’t get at it until they are 60.
Read more from the Auto-enrolment Roundtable