Six out of 10 companies do not have a communication policy or do not document it, even though they see good communication as key to the success of their DC pension schemes, according to Mercer research.
More than two-thirds, 68 per cent of survey participants, rated “limited member understanding” as one of the greatest challenges currently faced by DC plans, and nearly 90 per cent want to improve member education and understanding in the next 12 – 24 months.
Mercer’s latest DC survey analyses the DC pension provision of 354 UK companies with a total of 750,000 members and £18bn in assets under management.
“Being valued by employees” is rated amongst the top success factors for a scheme, 78 per cent, yet only one in six respondents,16 per cent, believe they have been successful in ensuring this is achieved. The survey also found that 34 per cent of sponsors have no formal objectives for their DC plan and 46 per cent have no defined success measures.
Trevor Rutter, a senior consultant in Mercer’s Workforce Communications business, says: “Good communication doesn’t have to be complicated. Take the stock market movements of the last few weeks. With a good communications plan, a drop in investment values might trigger a simple member alert explaining the long-term nature of pension savings, which could alleviate member fears at the same time as increase understanding.
“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.
“As this is the time of year when many DC plan members will be receiving their annual benefit statement, why not give some thought to using this as a vehicle for personally targeted messages at little additional cost?”