pension schemes

Defined contribution pension schemes

One of our Partners, Matthew Mitten comments on good communication of defined contribution pension schemes .

Defined contribution pensions must be communicated well, with information tailored to suit all staff, says Nicola Sullivan

The art of communicating the intricacies of defined contribution (DC) pension schemes involves making sure the type and volume of information provided is appropriate to the workforce.

Existing and prospective scheme members who are not yet ready to deal with large quantities of complex information about investments or charges, for instance, will be put off if that is what they receive. Conversely, there will be employees who are interested in the finer details of a scheme and require additional fact sheets and online information. So how can employers find the right balance?

Rob Fisher, head of marketing, DC and workplace savings at Fidelity Worldwide Investment, says: “When making decisions in life, most people use gut feelings and rule of thumb, and finance is no different. We cannot expect people to get all rational, very considered and analytical about pensions. It is more about laying out an honest big picture framework, which says ‘you have got to take control: join and save’.”

When it comes to communication methods, a simple, personalised approach can be effective, which is why Matthew Mitten, a partner at Secondsight, warns employers against any over-reliance on e-communications and flashy websites. “We believe people can communicate much better than machines or pieces of paper,” he says. “People don’t wake up and want to go looking at a pensions website, no matter how good it is.”

Read the full article here.