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.
Why Is It Important To Communicate Effectively?
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:
- Makes sure employees are aware of the benefit and options available
- Helps employees to understand their financial situation
- Meets legal and regulatory requirements.
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.
What Information Must Employers Communicate To Staff
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:
How Mandatory Communications Must Be Delivered
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.
- Send hard copy information via post or internal mail
- Hand over hard copy documents in person
- Send information in the body of an email
- Send information via PDF or other attachments via email.
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.
What information do I need to provide employees not being enrolled into the workplace pension?
There’s also further mandatory information you must communicate to those who aren’t being enrolled due to the eligibility criteria. This includes:
- Information about the jobholder’s right to opt into an auto-enrolment scheme
- Information about the right of an entitled worker to join a pension scheme.
As an employer do I need to keep a record of the communications I send?
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.
Optional Workplace Pension Communications
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 Material
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
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.
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.
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Ways To Effectively Communicate Your Workplace Pension To Employees
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 Education & Pension Advice
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:
- Make informed decisions about their savings
- Learn about the importance of saving for retirement
- Develop a tailored financial roadmap
- Recover old pension pots from previous jobs
- Better understand pension and retirement options on an individual basis.
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:
- Explanation of the workplace pension scheme and the process
- How much an employee’s pension pot is worth and forecasted retirement savings
- Employer contributions
- Investment funds for pension contributions
- Employee benefits portals to access information.
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:
- Review their pension pot
- Get support from pension provider
- Make changes to their pension
- Pay in higher contributions
- Manage their investment funds
- Access extra resources and tools.
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.
Build Your Pension Communications Plan
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.
Aim To Be Consistent
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:
- Promoting Understanding
Employees need to understand the details of their workplace pension in order to make informed decisions about their retirement. Consistent communications help employees understand the terms and conditions, how their contributions are invested, and what their benefits will be.
- Maintaining Confidence
Confidence in the scheme is essential for employees to feel secure about their retirement. Consistent communications about workplace pensions can help maintain employee confidence and trust in the benefit, and can prevent misunderstandings that could lead to decreased confidence.
- Encouraging Participation
Regular communications can help encourage employee participation in the pension plan. When employees understand the benefits of the plan and how it works, they are more likely to value it and stay enrolled.
Set Up Your Workplace Pension Scheme And Get Expert Advice
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 email@example.com.
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