Workers need help understanding their company pensions

Employee understanding of their companies’ pension schemes and effective communication are key issues facing employers, research has found.

A survey of 235 firms across in 13 countries in Europe, conducted by HR consultancy Mercer, found that six in 10 respondents cited those issues as the most pressing worries about defined contribution pension plans.

Mercer found that only a quarter of participating schemes offer financial planning services or investment advice to their members.

It also found while more than 80% of schemes consider websites and personalised communication important in communicating with members, websites are only provided by just over half the schemes, while most still rely mainly on newsletters and brochures.

Tim Burggraaf, a principal in Mercer’s retirement business, said there is a clear contrast between what employers want for their schemes and what is being achieved. “Putting resources into improving members’ understanding is paramount to get them to value the scheme.

“Communication programmes need to go beyond simply making information available. They should reach out to meet individual members’ needs. A measure of successful schemes is whether their members are sufficiently educated to understand how much to save for retirement,” he said.

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