Are your employees engaged with their pension?

72% of UK employees are not engaging with the workplace pension, which means they could be missing out on hundreds of thousands of pounds and could even be working longer than necessary!

In the same way, it could also mean that nearly three quarters of your employees do not value the contribution that your business makes towards their retirement – and that is likely to be a lot of money each year.

So, what can you do to encourage your employees to take a more active role?

Why communication is needed

Workplace pensions were initially designed to be a one size fits all. They were deemed to be suitable for everyone in a company whether they were senior management or a junior recruit. However, if senior management were to take financial advice it would be different from the advice provided to the junior recruit - based on income levels, life goals, attitude to risk and many other factors. This shows one reason why there is such a wide scope for good communication in workplace pensions.

Secondly, all workplace pension schemes must have a default pension fund (it’s the law) which should be designed to be appropriate for the needs of the average member, as far as practical. More than 90% of people in a defined contribution workplace pension scheme remain in the default fund.  In comparison, employees in a company could range from uniform sizes from small through to large, with the average size being medium.  However, would that mean everyone would be comfortable wearing a medium sized uniform?  Just in this same way, funds should be tailored to individual needs.

You may be thinking that all these default funds are similar in design and makeup, however, this couldn’t be further from the truth. There is a huge variation between workplace pension default funds with the various providers. Therefore, it’s important to elicit the services of companies such as Corinthian Benefits, who provide workplace education, increase employee engagement and financial understanding.

By your employees having a greater understanding and engagement with their pension, they are likely to increase their pension fund by a considerable amount.

A good check to see if your employees understand and appreciate your pension can be based on how many of them contribute more than the statutory minimum.  If only a low percentage are paying more, this usually means either a lack of engagement and/or understanding of their pension benefit.

You may also be able to support your employees further by looking at how contributions are made. If you are not already using salary sacrifice (or salary exchange as Corinthian Benefits prefer to call it) this can generate substantial savings for both your employees and your business.

To allow you to understand more about your workplace pension scheme, the British Plastic Federation have arranged for a free, no obligation Pension and Benefit audit (which includes a subsequent report) provided by Corinthian Benefits who are part of our business support network.

Your contact at Corinthian Benefits its George Bentham. George is an Employee Benefits Consultant at Corinthian Benefits, an independent corporate financial advice firm.  Corinthian help companies attract talent and retain their employees by creating comprehensive and personalised employee benefit solutions. Corinthian provide on-going support for all pension, protection and perk needs.

George Bentham
[email protected]
Tel: 0208 189 6134

29/02/2021