Employers should invest at least as much time and effort in passing on pensions information to employees as they spend on designing the pension plans, according to a pensions expert at business consultants Watson Wyatt.
Nicola Cull said: “Pensions are an important and complex aspect of the total reward package and they therefore need to be explained to employees.”
She said communication on pensions should never be one-size-fits-all, and that it ought to be as member-specific as possible.
Watson Wyatt pension research on effective member engagement found that women, low-income workers and those in non-professional occupations were “less financially confident and more likely to be financially illiterate”. Age was also a factor when communicating with staff.
“Companies invest considerable time and money in creating excellently designed pension schemes, but too often forget about how important it is to communicate well,” said Cull.
“The most common pitfall is to stop communicating. Once you start you must not stop. Communication should never be a one-off; it is vital to have regular updates and create a loop for feedback.”