Employees who receive strong communications around pension benefits are 20 per cent more likely to pay at least 4 per cent of their salary into their pension pot, according to a new study by the London School of Economics and Political Science (LSE).

Quality communications increased the likelihood of an employee being a member of the scheme by 17 per cent, regardless of salary.

The study found a quarter of members who did not receive strong communications did not know how much their employer was contributing on their behalf, compared with just 10 per cent of members who were receiving quality information. In schemes without strong communications, 17 per cent of members did not know their contribution level compared with 8 per cent of those in more engaged schemes.

The study, commissioned by Thomsons Online Benefits, examined the extent to which people are prepared to defer their income, positively value a pension and act upon those intentions. Two sets of employees were compared. One set of employees worked at companies who used a total rewards model including strong communication, possibly including a variety of tools to attract, motivate and engage employees in their reward programmes. The other set of staff were eligible for a company pension but were with employers who did not operate a total rewards model.

“Our research found that a clear system of communication and open dialogue significantly increases employee engagement levels with a workplace pension and improves staff contribution levels above four per cent,” LSE professor of management practice and author of the report Dr Sandy Pepper said.

“Without effective communication around auto-enrolment there is a fundamental risk that people will not recognise the importance and value of pension contributions. This represents a missed opportunity for businesses and a potential headache for Government.”

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