Employees want companies to be more transparent about savings shortfalls

Employees want their employers to be more open and honest about the challenges they face in building up adequate pensions savings.

New research from the Atlas Master Trust has found that workers want companies to be more transparent about savings shortfalls as current efforts to engage workers around pensions are falling short. In a study of 200 pensions managers, 200 senior finance professionals, 100 senior HR professionals and more than 2,000 employees, Atlas Master Trust was told by 96 per cent of workers that employers should be more forthright about saving levels, while 68 per cent feel that their employer could do more to encourage them to maximise their pension contributions.

Eighty-four per cent of the employees who participated in the research want a better understanding of how much more they need to save to have a comfortable retirement and more than three quarters would like to see examples of what other people in similar circumstances are doing with their pensions.

The finance and HR professionals questioned by Atlas broadly agree with the bulk of employees, with 90 per cent of HR leaders and 81 per cent of finance leaders believing that they need to be more transparent about saving gaps in their pension communications to members. Only 39 per cent of HR personnel, and 22 per cent of finance staff, claim to be very satisfied with their efforts to drive engagement. In addition, 91 per cent of HR and finance leaders, and 93 per cent of pensions professionals, acknowledge that employers have a responsibility to provide more financial education to their staff.

Other findings from the research include 72 per cent of employees admitting that they are not actively engaged with their workplace pension, and more than a quarter revealing that they never review their pension. The study suggests that this is a consequence of 77 per cent of employees saying that they do not understand enough about pensions to make considered decisions — 61 per cent said they find pensions confusing, 59 per cent do not know how much they should be putting into a pension and 74 per cent do not understand the differences between different scheme arrangements.

Only 6 per cent of workers regularly review their pension and consider their investment options.

In what Atlas referred to as an alarming finding, the majority (60 per cent) of employees believe that minimum contribution levels for auto-enrolment represent Government-recommended saving levels. Meanwhile, a quarter of those surveyed claim that they will in all likelihood just rely on a state pension for their retirement.

Atlas Master Trust, head of engagement, Roz Watson said employees are calling for a more “pragmatic and honest” approach from their employers when it comes to pensions. She said that this needed to be based around the “three Ts” — transparency, training and tools.

“There needs to be a clear separation between engagement and member communications,” she explained. “Too many employers are focusing their engagement efforts on increasing visits to a website or downloads of an app. Real engagement is about driving genuine awareness and knowledge of pensions, empowering members to make proactive and informed decisions and to understand the implications of these decisions.

“These findings demonstrate why driving a better general understanding and knowledge around pensions is so critical, to ensure people feel empowered to make informed decisions, based on all of the options available to them, and in control of their own future.”

Watson added that a new approach to engagement is needed. She argued that it should be targeted around education, access and honest dialogue: “Too many employees are being turned off by uninspiring communications that they feel don’t reflect their needs or personal situation."

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