Gallagher has published a new bulletin that calls for the pensions industry to “fundamentally rethink member engagement” in this age of digital.
“For too long now, communication has been a ‘nice to have’ in the pensions industry; it’s time to change. Making sure you’ve simply got the communication ‘box ticked’ is no longer good enough and is unlikely to satisfy the needs of employers, trustees, members or The Pensions Regulator,” commented Gallagher employee communication practice managing director Roger Hattam. “It also wastes valuable time, money and resources in the process.”
In the bulletin, Gallagher identifies five key trends which reflect the direction the pensions industry is heading, and how trustees must respond in order to stay relevant.
The five trends are:
- Communication is integral to trustees’ legal duties: Trustees must demonstrate the value their deliver to members in order to satisfy The Pensions Regulator’s 21st Century Trusteeship. In order to accomplish this, Gallagher has advised that trustees must “think strategically, setting measurable communications and engagement objectives before then considering the multiple channels that can best deliver this throughout a member’s journey.”
- Pensions can no longer be considered in silos: Preparing for retirement now involves much more than just pensions, Gallagher mentioned. A “retirement package” can now include other investments and phased retirement schemes, and those just getting into pensions will have “very different ideas about money and communications,” the firm noted.
- Master trusts force trustees to redefine member engagement: The move to master trusts is accelerating, and organisations may be swayed into choosing the provider’s “one size fits all” communications. Gallagher cautioned that while this approach may reduce costs, the loss of control over member messaging may be “a step too far” for the priciest employee benefit offered.
- Data is key: Trustees seldom measure the impact of pension communications and levels of member engagement, despite them being more than comfortable with data analysis, metrics and reporting across different aspects of scheme governance – this is something Gallagher says must change, as communicating said impact proves a return on investment.
- The world is digital, and pensions needs to catch up: According to Gallagher, “the world beyond pensions is digital.” People now want to be able to interact with their pension and source – on demand and at their fingertips. The industry can no longer afford to stick to analogue, which fails to meet the demands of the 21st century, Gallagher added.
“The move to digital makes sense on multiple levels and we expect that in a not-so-distant future, trustees will be as obsessed with levels of member engagement as they currently are with risk and investment returns, meaning they are truly 21st-Century trustees,” Hattam concluded.