The 2014 Budget created great deal of regulatory upheaval for defined contribution schemes, not least in communications. Sara Benwell caught up with three of the schemes that responded to J.P. Morgan Asset Management’s DC Landscape survey to find out how they’ve coped
The biggest communications challenge that came out of the 2014 Budget was working out how to embed extra complications into an already complex communications strategy, says Oliver Polson, pension manager for the Molson Coors Brewing Company scheme.
He explains: “We were concerned about over-complicating matters and we didn’t want to stop our existing communications either. We wanted to weave the new information into our existing strategy – we didn’t want overload employees with too much pension information, because sometimes that can turn people off.”
To achieve this, the scheme decided to create a short four-page booklet that detailed the changes. They decided to deliver it directly to the members, something the scheme has never done before. Alongside this the scheme updated its website, created podcasts and amended the existing literature.
We didn’t want to shove communications down employees’ throats”
However, the board were careful to avoid over-pressuring employees.
Polson says: “We very much didn’t want to shove communications down employees’ throats. We wanted to raise awareness and make sure everything else was updated. And then we’ve made it very clear that they should either contact our HR department or Friends Life should they want to find out more.”
Those employees who did contact HR or the provider were given “fairly bespoke, one-onone guidance”.
The result was a fully integrated communications strategy, says Polson.
He explains: “Prior to this we had a fourpoint communications strategy. What we didn’t want to do with the Budget is scrap all that, so we’ve continued with our existing approach – but now it’s a five-point strategy.
“We’ve woven in the fact that we want an objective of increasing awareness and understanding of the new retirement options, but we all the other things are still as important.
“I think that’s going back to one of the big challenges: how do we fit in this new important information into a communications strategy that has a lot of important things in it anyway, without overloading employees?”
Next on the agenda is giving members access to advice, according to Polson.
He explains: “We used to help members out with an annuity broking service in the old world because we thought that was the right level to provide, but in the new world we are very much looking at the options. We didn’t want to rush into anything, because I believe that things are going to evolve over time.
We are looking at a web-based portal that would initially provide some sort of robot advice”
He adds that as a result of speaking to various advisers, he knows that they are all developing products to provide access to some form of financial advice.
“We are looking,” he says, “at a web-based portal that would initially provide some sort of robot advice, but then give employees – and this depends which product we go for – either a direct route to a selected single independent financial adviser or give an option to choose one from a panel.”
He is expecting this advice portal to be available to members later this year.
For Hymans Robertson’s pension scheme, the biggest challenge was ensuring that the new complexities were fully understood, says Steve Moore, the company’s head of HR.
He explains: “Even in an organisation that has many people who understand pensions, we never assume that everyone understands all the complexities.”
Following the seismic Budget changes of 2014, the scheme published some general news articles on the intranet to raise awareness and create a dialogue on the topic within the business.
Moore believes that providing third-party information was crucial.
This was well received and contributed to a 60% increase in traffic to our pension homepage
He says: “We also took advantage of the wealth of informative Budget reaction in the public domain and pointed people towards it – our pension provider in particular had some very good summary video clips and blogs on their website.
“This was well received and contributed to a 60% increase in traffic to our pension homepage between quarter one and quarter two.”
The scheme’s communications strategy has not changed substantially as a result of the Budget, says Moore, as it already had varied and sophisticated communications channels.
He explains: “We make good use of our internal communication channels, which include the intranet, blogs, newsletters and even roadshows at certain points in the year.
What has changed over the past year is the frequency of that communication”
“Part of the success of this is down to how closely we work with Peter Hennessey, our internal communication manager, to ensure we communicate the right message at the right time and in the right way.
“What has changed over the past year is the frequency of that communication to ensure people are aware of what is happening and how it may have an impact on them.”
The scheme is planning to build on what it calls the ‘Hymans Robertson Employee Promise’.
Moore explains: “Everyone in our pension plan will receive an individual statement showing whether or not they are on track to reach their target retirement income.
“Then in the next month all of the members in our pension plan will be able to access our online ‘Guided Outcomes’ solution.”
Guided Outcomes uses complex algorithms to tell users whether they are on track for their required retirement savings, helps them model alternative saving options and can take control of that journey to help them reach their goals
Plastic Omnium Group
The greatest challenge was managing members’ expectations when many providers were not yet in a place to provide all of the freedoms, explains Brian O’Sullivan, the chairman of trustees of the Plastic Omnium Group Retirement Benefit scheme.
He elaborates: “As an example, our pension provider is Prudential, one of the largest, and earlier this year, in the spring, Prudential were still surveying their customers to determine what they would offer in the future.
“So a number of these greater freedoms will be offered, but for some of them it took until the end of 2015 before the provider was in a position to make such an offer.”
The scheme adopted a wait-and-see approach, preferring to keep communications limited until they had a better idea of when they might be able to offer solutions.
We had voicemails from half past eight in the morning on the very first day”
They made members aware of the changes within a newsletter, a method adopted as part of a wider revamp of the scheme’s communications. In the interim, they fielded calls from members who expressed an interest, explaining the situation.
O’Sullivan says that interest was high. “There was a definite, noticeable upturn in the general interest both from active and deferred members. We had voicemails from half past eight in the morning on the very first day.
“We were aware of what our provider was already making available, so there were one or two options that were going to be available from 6 April. However, we had to tell members that if they were interested in other options, including drawdown – one of the most likely approaches to generate interest – we wouldn’t be able to accommodate them in the scheme.”
In the future, O’Sullivan is expecting to bring a lot more solutions, including drawdown, in house.
He believes this is crucial for the integrity of the scheme.
“There will be towards the end of this year a relatively simple in-scheme drawdown option. So we still encourage people to look at open-market alternatives but there’s also a feeling on the part of the trustees that if we want this to be a good scheme, that people coming to take benefits should not automatically be forced to take an open-market transfer and should not be denied some of the greater freedoms that it was intended would be made available to them.”
O’Sullivan is expecting to bring a lot more solutions, including drawdown, in house”
The scheme will also be employing Hymans Robertson’s Guided Outcomes, as part of a wider strategy to tell newly auto-enrolledmembers about the benefits of pension saving.
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