Pension priorities: Educating employees on auto enrolment & pension contributions

You know how the old sayings go.

Save for a rainy day! Save more, spend less! They might not be the golden rule for your employees as things stand, but it’s certainly one they need to consider.

Their golden years will sadly (depending on how you accept the inevitable ageing process) be fast approaching, and there’s a good chance more needs to be done to educate your colleagues on the workplace pension offering.

According to Aon’s Benefits and Trends Survey¹, 67% of employers feel they aren’t doing enough to support financial wellbeing and pensions through communication. It’s time to start reducing that number!

As people start to consider their health, wealth and self, you can be a big part of helping employees to plan for a financially secure future.

Promoting Pensions

We know that pensions aren’t the most captivating subject.

Each employee is different. From the financially savvy to Generation Z, opinions differ on how to handle money. Some will have built quite the nest egg, while in a world where the pound continues to struggle, some may be happy to spend their hard-earned cash on living for today.

That’s all well and good, but saving for the future will ensure a comfortable retirement. So, how do you begin that education process?

Simple. Start with the basic fundamentals of a workplace pension and communicate them in an effective manner.

An expert’s guide

Under the Pensions Act 2008², every employer in the UK must put their eligible staff into a workplace pension and pay into it. Auto enrolment was also introduced in April 2012, requiring every employer to assess their employees. If eligible, they are automatically entered into the company pension plan at the minimum level, offering the chance to opt out should they wish.

Our very own benefit’s expert, Joy Waugh, feels it’s vital that you do more to raise awareness of pensions and auto enrolment, helping your colleagues prepare for tomorrow, today.

‘Employers can do an awful lot more to raise awareness.

‘There needs to be a programme of communicating what benefits you offer, especially your pension. This can be prior to that person joining the company, or shortly after they start. Have you gone out of your way to inform everyone that they’ll be automatically enrolled into your scheme if they meet the minimum requirements?

‘Yes, it’s an easy way for them to put money aside, but they might not be aware of how things work. Why it’s a legal requirement for them to be enrolled. How they can opt out should they wish.

‘You need to communicate everything that will happen. The contributions you provide, what investment funds their savings will use. There’s a huge amount of interest in ethically sustainable funds at the moment.

‘Remember, if you provide more than the legal minimum contribution of 3%, then why wouldn’t you want to shout about that. It’s a brilliant incentive. If an employer takes this approach, then this is a great endorsement of why you should go and work for them.’

To find out how Zest’s employee benefit technology can help support your pension offering, click here.