Recruitment organisation Hays has run pensions education presentations for its 3,200 UK employees to ensure that staff understand the basic concepts of how their workplace pension works.
Improving employees’ fundamental knowledge of pensions can help them to pinpoint wider issues that may impact their retirement savings, for example, the potential impact a gender pay gap or career breaks may have on female employees’ pension savings, says Rosemary Lemon, group head of reward at Hays.
As part of its pensions education, Hays delivered hour-long back-to-basics presentations over a three-week period in October 2017 to help employees grasp basic facts about their pension. This included an explanation of what a defined contribution (DC) pension is, clarification of what both employees and employers contribute to the scheme, highlighting the tax relief available and demonstrating what employees can do with their pension pot at retirement. The presentations also clarified commonly-used pensions jargon.
“Unless people really understand those basics, I don’t think they’re necessarily going to start to appreciate the gap that might be created by things like going on maternity leave or having a career break to raise children, or even the gender pay gap,” says Lemon. “I think [we’ve] got to go right back to basics for people to even start to think about nuances as to what difference it’s going to make to them.”
In addition to its face-to-face presentations, which were also provided as webinars for staff who could not attend in person, Hays launched an online modelling tool in conjunction with its pension provider in December 2017 for employees to explore their potential options at retirement. In addition, in January 2018 the organisation began sending email communications to employees every month about different pensions subjects. It will also deliver the back-to-basics presentations again. “We get new people all the time, so [we] can’t really stop,” adds Lemon.
Hays opens its flexible benefits window three times a year to enable employees to amend their pension contributions in November, February and July, although employees are also able to make changes at life events, for example if they get married or have children. “There’s plenty of opportunity for people to adjust, either because of [the] annual allowance or simply because they want to increase their pension contributions,” says Lemon.
Anecdotal feedback from employees has shown the success of the back-to-basics pensions presentations, across both male and female employees. Lemon says: “Just talking to people in everyday language and explaining [pensions] has made a big difference. I think it’s really important to do that before [starting] to talk about the nuances and get people thinking, ‘well what happens if I take a career break?’, because people don’t even understand how it would impact them unless they actually understand how [pensions work] in the first place.”