Staff will not fully value and appreciate the benefit of their occupational pension scheme unless employers communicate the scheme effectively.
That is the message from a new guide, Pensions communications – realising the value, published by the Chartered Institute of Personnel and Development (CIPD) and the Employer Task Force on Pensions (ETF) today.
The guide uses case studies to demonstrate how small, medium and large organisations can explain their pension schemes effectively to benefit the business.
Charles Cotton, CIPD reward adviser, said: “Pensions can cost employers a lot of money – but they can also be a huge investment for the business.
“As people become more worried about the future of retirement, the pension offered by an employer could become more of a deciding factor for potential employees. But far too many employers with excellent pension arrangements are hiding their lights under a bushel,” he said.
“There is no single great pension scheme or one way to communicate. Employers should think about the bigger total reward picture and select a pension scheme that meets the needs of the business.
“They also need to think about the procedure and how they communicate the pension scheme to their staff, making sure they invest enough time and money to select a communication medium suitable for their staff.”
CIPD research has found that few employers keep staff informed and up-to-date about their pension arrangements.
Its recent report, Pensions and Retirement: Attitudes and Expectations, found almost one in five over-50-year-olds interviewed said they had little or no understanding of how their pension schemes worked. This rose to one in three respondents in the under-25 age group.
Sir Peter Davis, chairman of the ETF, said: “Pensions and savings are becoming more and more important in a society where people are living longer.
“Many people do not understand the value of employer pension provision and the lack of awareness has led to lack of demand, which means employers are less likely to provide pensions.”