Help your employees make choices for the surviving dependants’ pension

31 March 2023


The new pensions system means that there is more to choose than in the old system. This certainly applies to the surviving dependants’ pension. How do you help employees to make these choices? And how can you activate them to do something?

A good and reliable pension scheme strengthens the bond with your employees and is your calling card on the labour market. It’s important that your employees are well informed about what your pension scheme entails and what it means for them. Employees who know what to expect from their pension scheme enjoy financial peace of mind – no small luxury. And yet, pension scheme engagement often leaves room for improvement; it certainly does not come naturally.

Why is it important for employees to be involved?
The pension scheme is usually not a daily priority for employees. Everyone knows that. Pension is, however, an expensive employee benefit. As an employer, you want everything surrounding it to be well organised. Employee engagement is indispensable here, and it is even more important in the new system, as there are more choices. Everything will soon no longer be taken care of by default: employees will really have to make their own choices. First and foremost, increasing engagement means that employees will have to be aware that they have to make choices and can adapt their pension to their situation.

How can you increase this engagement?
Making pensions accessible is mainly a matter of removing barriers. You do that by not telling complicated stories. Pension administrator and employer can band together in this regard. The new Future of Pensions Act (Wtp) may be complex, but there is no reason to saddle employees with that complexity. Make it easy. BeFrank does this, for example, by presenting each choice in a simple, understandable and accessible way in the online environment. In addition, properly guiding employees helps in lowering ‘pension barriers’. The new pension law stipulates that employees must receive this guidance.

So what exactly is there to choose when it comes to the surviving dependants’ pension?

Not only the retirement pension changes due to the Wtp, but the surviving dependants’ pension as well. It will soon become a percentage of everyone’s salary, with a maximum of 50 per cent. Employers will cover this, or part of it.

Employees are then given three choices:
1. If the employer has promised a percentage lower than 50%, they can often independently top up the cover to 50%.
2. On top of that, Anw survivor benefit shortfall insurance can be a good and affordable solution as an income supplement for your partner.
3. Finally, there is the option to continue the partner’s pension if an employee leaves employment.

What does guidance on these choices entail?
BeFrank will provide a Survivor’s Pension Assistance on the personal pension page. This tool will go live soon. For now, it will only feature closing the Anw gap as a possibility, since the other choices can only be made once the Wtp has taken effect and the new pension scheme is known. At that point, the tool will provide a complete overview of everything that the employer has arranged for the surviving dependants, plus any possibility of making additional choices yourself. People are thus taken through those choices step by step.

Can you do more to help your employees more make choices?
Besides using tooling, you can also take other initiatives to raise pension awareness, such as with presentations, campaigns or other activations. BeFrank, for example, literally helps people step over a ‘pension threshold’ and then helps them log in and answer pension questions. It also often agrees on a target login rate with the employer. If achieved, it should naturally be celebrated, for example with delicious smoothies at the customer’s office. This in turn is a great time to encourage people to make choices about their pension scheme. In this way, you can increase engagement and make retirement choices more accessible.

This article appeared on on 29 March.