Four tips for greater engagement.
Your pension: quite simply, it’s your salary for later. And there has been a lot happening around pensions in recent years. Employees often have poor insight into their own pension situation. That’s a shame, because your pension involves a lot of money. After the salary it is the most expensive employment benefit.
Although it is now clear to almost everyone that a pension is important, there are quite a few factors that influence its importance. For example, if you’re a newly graduated 23-year-old working at your first employer, you’re more interested in paying off your student debt and saving for a house or car than in the pension that you have to wait more than forty years for. And that’s no surprise. Add to that the fact that you cannot see on your payslip how big your pension pot is – you can only see what it costs you every month – or how much your organisation is contributing. That latter aspect is a missed opportunity for your organisation.
A substantial amount of money goes into pensions without employees seeing it directly. How can you take advantage of this? Here are four tips to get your employees more engaged with their own pension. And your organisation will also benefit.
Tip 1: Communicate clearly
The pension is there to keep your employees financially fit. Not everyone understands clearly how pensions work. At BeFrank we therefore use various ways of communicating with the participants who are building up a pension with us. Sometimes explaining things with a clear piece of text works well, but in other situations a video might be the way to clarify something very complicated quickly and effectively. Hence all our new participants receive a personalised welcome video. We also all need to make pensions a bit more fun.
Tip 2: Stimulate your employees
An important but often overlooked aspect: actively engaging your employees with their pension. The new pension agreement means that we are moving towards an ever more individualised system. But it is still just as important for your organisation that employees are engaged with their pension as much as possible. You can position yourself as a good employer by paying plenty of attention to your employees’ financial fitness, both now and in the future. In the pre-COVID era we visited customers in order to literally help employees over the pension threshold and log in together. Some employees are in a better position than they think, whilst for others there is still time to improve matters. But in all cases there is one important prerequisite: you need to know where you stand. Then you can make adjustments if necessary. Because of the coronavirus measures we are now trying to contact participants digitally.
Tip 3: Ensure easy access
Good communication resources ensure that information becomes more accessible, but do not overlook the technology either. At BeFrank we translate this into an online portal at organisation level in which the HR department can easily find all the information relating to the organisation’s pensions and make changes. This portal also shows how many employees have already logged in or have made particular choices. At the employee level we have a simple but secure app in which your employee can find all the information about their pension. This can be accessed anywhere at any time. It’s about making pensions accessible to the people. That way, they gain insight and understand what’s involved.
Tip 4: Accept social responsibility
Pension contributions are invested. Where they are invested can vary significantly. The question that you as an organisation must therefore ask is: ‘In what sort of world do I want to live (in the future)?’ Your employees also play an important role in this. The younger generation in particular want to invest in a sustainable world. That can also be done through your pension. With us they can choose their own investment risk and form of investment, and see the impact on the app. Both on the financial and the sustainability side of the equation. By showing how much water is being saved, for example. That frames it in concrete – and therefore tangible – terms.
Making the abstract concept of a pension tangible helps make it real to the employee. But this works on many levels. It requires a joint approach by the organisation and the pension provider. Together we can ensure that employees don’t ignore their pension, but engage with it. And by paying more attention to it, appreciation will also increase. A win-win situation.
This article appeared in PW Magazine on 3 November 2020.