Employers have a duty to auto-enrol eligible employees into a suitable workplace pension. As an employer, not only are you obliged to set up a pension for staff, you also have to maintain the scheme. For employees to understand how pensions work, though, you must communicate this benefit well.
It’s mandatory for employers to communicate certain aspects of their workplace pension. You need to know what these are to get it right. This guide covers what to communicate and the most effective methods of doing so.
Our 2022 Workplace Pension Survey found 28% of staff didn’t have a good understanding of their pension. This suggests poor communication and shows the need for improvements. Providing employees with clear and consistent communication:
There is certain mandatory information you must provide to your employees. There is also other information that you can provide but aren’t legally obliged too, however it is best practice to do so.
Providing clear communication about your workplace pension helps to ensure that as an employer, you are doing your upmost to make sure your workforce no everything they need to know.
Before you set up a workplace pension, or enrol a new employee into your existing scheme, there’s certain information that needs to be communicated.
As part of your pension duties, The Pensions Regulator outlines what you must inform staff of.
Employers have 6 weeks to communicate with an employee about their workplace pension from the date that they joined the company. These communications must include the following:
Required Information | |
|---|---|
✅ | The auto-enrolment date |
✅ | The type of scheme it is and who runs it |
✅ | If tax relief is given on employee contributions |
✅ | Auto-enrolment and how it works |
✅ | The potential risks of investments |
✅ | The option to opt out of the scheme if they wish |
✅ | Process of opting out and opting back in |
✅ | Employee and employer contributions |
✅ | Postponement processes if you are postponing automatic enrolment duties. |
It’s important to note how The Pensions Regulator views ‘giving information’. As per their regulations, employers must give information via any of the below methods.
Whether you use your company website, email or send documents via post, the information must be provided through these methods, rather than just sign-posting to it.
There’s also further mandatory information you must communicate to those who aren’t being enrolled due to the eligibility criteria. This includes:
Employers must keep records of their workplace pension scheme as part of their legal duties. All records, including opt in, opt out, and joining notices received by all workers, must be retained as this is proof that their rights have been exercised.
Record of scheme membership data and any postponement notices should also be kept. All records must be kept for at least 6 years, except opt-out notices which should be kept for 4 years.
While some forms of pension communication are legally required, others are optional. As an employer you don’t have to provide them, however it’s best practice too. The more information you can provide your staff to help them get to grips with their pensions the better.
Investment education materials can be a valuable resource for employees looking to understand their investment options under their workplace pension.
These materials can include brochures, seminars, or other resources that explain the various investment options available and help employees make informed decisions about how to allocate their retirement savings.
Retirement planning tools, such as calculators, worksheets, or other resources, can help employees estimate their retirement income needs and determine how much they should be saving for retirement.
While not mandatory, these tools can be an effective way to educate employees about their retirement prospects and encourage them to take an active role in planning for their future.
A lot of pension scheme providers have various different tools and documentation such as pension calculators, key pension facts and support guides.
These can support your own communications and ensure staff have the right information.
Nick Nelms
Senior Consultant, Employee Benefits
Providers will sometimes make changes to their products so it’s important to keep employees update to date with what these are. They also often write a lot of news stories which can help employees better understand the world of pensions.
This can help them become more informed when it comes to making decisions about their own investments. You can share really useful content without having to create it yourself.
Communication is key when it comes to your employee benefits package. However, when it comes to workplace pensions, employees aren’t happy with what their employers are providing. Our 2022 Workplace Pension Survey survey showed that:
There are several ways of communicating your scheme to employees. Some of which may suit your workforce more than others. You may even use multiple methods to ensure your team is aware of the scheme. The following communication channels will help you make sure you provide all necessary information:
Financial advice has an important role in workplace financial education. Enlisting external support can help your business to create an effective communications plan. At the same time, it also boosts awareness and engagement for your workplace pension.
Many companies offer pensions advice to support your employees’ finances. Utilising financial advisers when managing your workplace pension can help your employees to:
According to our survey, 1 in 3 employees want a 1-2-1 company paid meeting with a financial adviser. This highlights the demand for support, so it’s worthwhile considering.
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Access to financial advice can help your employees have personalised retirement options. They can also improve their financial wellbeing as a whole.
Interactive approaches such as webinars and 1-2-1’s are great for improving employee engagement. These can include useful infographics with digestible information. Employees can also ask questions and receive guidance on the spot.
Webinars can provide visualisations to better explain the scheme, such as how contributions break down. 1-2-1’s allow employees to ask questions they may not have wanted to share in an open discussion. These only need to be around 30-minute sessions.
Companies can offer this themselves or work with a company for extra support. At Drewberry™, our team of experts can help you develop a communications plan. This can cover things like:
Email is the most common communications method for employee benefits. You can send ongoing communications about your workplace pension, including updates, statements, and savings.
Pension scheme providers often have email templates, which makes this process easier. Created by the pension provider, the templates ensure you’re communicating the right information. It’s a matter of changing the content to reflect your business. Templates can cover auto-enrolment, opt-out processes and postponement, helping to reduce your workload.
Online platforms serve as a toolkit containing all your workplace pension information. Located in one place, platforms are accessible, convenient, and interactive. These can host your company’s entire employee benefits package too, not just your workplace pension.
Online portals enable staff to carry out the following actions:
Like email, an online portal can form part of your employment induction process. This ensures staff have the information they need at their fingertips. Such platforms are useful for communication. Employers can redirect their employees to the portal whenever they need guidance or to communicate changes to the pension scheme.
An online platform is a great place to share your Total Reward Statements. These cover not only the workplace pension scheme but your other benefits too. This is a document sent to all staff, detailing their entitled benefits and rewards in one place.
A more formal approach to your communications is through postal letters. This enables scheme members to keep physical records of their workplace pensions. Formal letters often communicate the legal side of the pension scheme to employees. It also shows that as an employer, you’re maintaining your duties.
With many companies aiming to reduce their environmental impact and become B Corp certified, paper communications are becoming less and less popular.
Digital alternatives are taking preference, as it’s better for the planet and can save time and money.
Andrew Southgate
Senior Financial Planner
The above methods are effective for informing employees about their workplace pension. They’ll engage more with the scheme if communication is executed well. It’s essential to ensure the information is simple, clear and concise.
Alongside giving your employees the mandatory information about their workplace pension, you also need to develop a communications plan which maps out how you’re going to regularly communicate the scheme.
It’s essential to tailor your communications to your employee demographics, though. Some may prefer one method over the other, so it’s worth asking their preference. Staff may prefer postal documents to keep a physical record. Younger staff, meanwhile, are likely to favour interactive online portals.
Another vital aspect to consider is the timing of your pension communications. It’s not enough to provide information once. You need to have a clear communication plan which runs annually. This should map out when information is going to be sent in the year and through which different channels.
As well as having a clear schedule, it is important for your communications to be consistent in terms of messaging. Having clear and regular comms is vital when it comes to:
Communication is essential for your employees to understand your company employee benefits. That said, it can sometimes be a difficult task to know how best to do so and which information to provide.
If this is the case, you can speak to a financial adviser who can help you build your communications strategy. Our team of pension experts at Drewberry can help you develop this. Not only that, they can also support you when initially setting up your pension scheme.
If you would like further guidance from our experts to ensure your team understands their pension, don’t hesitate to contact us. You can call us on 02074425880 or email at help@drewberry.co.uk.
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