Pensions: why it pays off to educate employees on auto enrolment
According to Aon’s Benefits and Trends Survey, 67% of employers feel they aren’t doing enough to support employee financial wellbeing and pensions through communication.
As people start to consider their health and wealth, employers can be a big part of helping employees plan for a financially secure future.
Promoting pensions
Pensions aren’t the most captivating subject, unless you are looking to retire in the next few years.
Each employee is different. From the financially savvy to Generation Z, opinions differ on how to handle money. Some will have built themselves a nest egg, while in a world where the pound continues to struggle, some may be happy to spend their hard-earned cash on living for today.
That’s all well and good, but saving for the future will ensure a comfortable retirement. So, how do you begin that education process?
Start with the basic fundamentals of a workplace pension and communicate them in an effective manner.
An expert’s guide
Under the Pensions Act 2008, every employer in the UK must put their eligible staff into a workplace pension and pay into it. Auto-enrolment was introduced in April 2012, requiring every employer to assess their employees. If eligible, they are automatically entered into the company pension plan at the minimum level, offering the chance to opt out should they wish.
Zest’s benefits expert, Joy Waugh, feels it’s vital that employers do more to raise awareness of pensions and auto-enrolment, helping employees prepare for tomorrow.
“Employers can do an awful lot more to raise awareness,” Waugh says.
“There needs to be a programme of communicating what benefits you offer, especially your pension. This can be prior to that person joining the company, or shortly after they start. Have you gone out of your way to inform everyone that they’ll be automatically enrolled into your scheme if they meet the minimum requirements?
‘Yes, it’s an easy way for them to put money aside, but they might not be aware of how things work. For example, why it’s a legal requirement for them to be enrolled, and how they can opt out should they wish.
‘You need to communicate everything that will happen. The contributions you provide, what investment funds their savings will use. There’s a huge amount of interest in ethically sustainable funds at the moment.
‘Remember, if you provide more than the legal minimum contribution of 3%, then why wouldn’t you want to shout about that? It’s a brilliant incentive. If an employer takes this approach, this is a great endorsement of why you should go and work for them.’
To find out how Zest’s employee benefit technology can help support your pension offering, click here.
Supplied by REBA Associate Member, Zest
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