Pension shortfall: employees calling on businesses to provide more ‘transparent’ advice

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Pension shortfall: HR and workers calling on employers to provide more 'transparent' advice

The vast majority of HR leaders and workers believe employers need to be more transparent about pension savings shortfalls to their staff so they are better prepared to build up a healthy pension pot.

This research comes from Atlas Master Trust, a trustee-led Master Trust which represents the choice for employers who want their people to be the ‘masters’ of their own financial futures, which is part of Capita. It found that 90 per cent of HR leaders believe that employers need to be clearer when discussing pensions.

An even higher amount of employees (96 per cent) believe their employers should be more transparent. As well as 68 per cent feel that their employer could do more to encourage them to save more for their pensions.

Nearly three quarters (72 per cent) of employees admit they are not engaged with their workplace pension, with 28 per cent stating they never review their pension and try not to think about it.

More than half (60 per cent) of employees believe that the basic levels of auto-enrollment contributions will be enough to achieve a retirement income. With a quarter (25 per cent) saying they “will probably just rely on a state pension” for their retirement.

There seems to be a lot of confusion surrounding pensions for employees as 61 per cent do not fully understand their pension, 59 per cent do not know how much money they should be putting in to their pension and 74 per cent do not understand the difference between certain pension arrangements like defined contribution, defined benefit and master trusts.

A huge 91 per cent of HR leaders hold the opinion that employers have a responsibility to provide more financial education to employees.

Roz Watson, head of engagement, at Atlas Master Trust said:

Employees are calling for a more pragmatic and honest approach from their employers when it comes to pensions – one that is based around the ‘Three Ts’ – transparency, training and tools. There needs to be a clear separation between engagement and member communications. Too many employers are focusing their engagement efforts on increasing visits to a website or downloads of an app. Real engagement is about driving genuine awareness and knowledge of pensions, empowering members to make proactive and informed decisions and to understand the implications of these decisions.

To obtain these results Atlas Master Trust asked 200 pensions managers, 200 senior finance professionals, 100 senior HR professionals and more than 2,000 employees.

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2 Comments - Write a Comment

  1. “…. As well as 68 per cent feel that their employer could do more to encourage them to save more for their pensions…..”
    My mum always said to take responsibility for your own stuff. With that in mind, if you really want to save more for your retirement, then JDI ! – don’t wait for someone else to ‘encourage’ you.
    My guess is that this is a loaded comment and in fact relates to a desire for employers to put more in to employees’ savings, via match-funding for example. This is something completely different, which I sense the article is consciously misrepresenting.
    Saying that you ‘want someone else to put more in before you do’ is an even worse abdication of personal responsibility.
    DC pensions are not complicated.

  2. If we rewind from this situation, does anyone else ever remember the issue that if we advise inappropriately we are also partly accountable for decisions taken on that advice? That’s why we refer people back to the schemes themselves. The employers are no longer the pension ‘managers’ and although it is altogether possible to bring in someone from the pension scheme, employees don’t show up for their sessions! The very best thing that you can do is help your employees become self-sufficient in this and if there is education to be done, it’s that the pension is theirs, not their employer’s, so read your statements, read your projections and ask questions.

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