Personalisation is the key to improving member engagement in defined contribution (DC) pension schemes, reports Spence Johnson.

The marketing intelligence provider behind the 2010 Pensions Communications Project says that plans must target their communication in as personalised a way as possible - with schemes speaking to members rather than at them, and addressing them as people with specific needs and priorities.

Education, while an imperative tool for improving DC engagement, is only worthy when personalised, with clear guidance that is tailored to the member. Providers, Spence Johnson said, should refocus their energies on nudging people into action without crossing regulatory boundaries.

"These conclusions will be challenging for many pension schemes which currently tend to believe that engagement is best achieved by creating small scale segmented campaigns," commented Magnus Spence, director of Spence Johnson. "Our message is that this low scale, marketing led approach does not allow for the cost-effective use of vital new communications techniques - particularly Personalisation - which we think is key to future engagement success."

Nils Johnson, director of Spence Johnson, added: "Too many pensions professionals seem stuck on the idea that education is the key to engagement. We have shown that campaigns that attempt to teach people investment basics are likely to be ineffective. UK pension trustees need to look at what works in the DC world which is to give members help with their specific and personalised questions of 'what to do'."

The project was sponsored by AEGON, AXA, BlackRock, the National Association of Pension Funds (NAPF), Prudential, Scottish Widows, SHILLING Communication and Standard Life.

The research summary is available here.

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