The proportion of respondents that offer at-retirement support to employees has changed little over the years. This year, 40% do so, compared with 46% in 2016 and 45% in 2015.
Supporting staff at retirement is key, particularly following the changes that came into effect under 2015's pension changes, which introduced much greater choice for employees. Who has responsibility for providing support has changed little in recent years, with in-house HR/benefits/reward/learning and development teams, pension providers and independent financial advisers remaining the most popular choices.
The introduction of the pension freedoms also means that type of information now required by staff approaching retirement has changed, which, in turn, may have impacted how respondents deliver support. When we asked this question prior to the introduction of the pension freedoms in 2014, access to an annuity service other than the organisation's pension provider was the most popular means of support. This year, nearly two-thirds (61%) of respondents offer access to financial advice as the most popular form of support for staff approaching retirement, with over one-third (36%) giving staff access to online modelling tools. One third (33%) also offer staff the ability to draw down their pension, and provide access to information via the organisation's intranet site, respectively.
Who is responsible for providing at-retirement support in their organisation (above text)
Sample: All respondents that provide at-retirement support for staff (61)
HR/benefits/learning and development team 41%
In-house pensions team 34%
Independent financial advisor 28%
Pension provider 25%
Benefits consultant 18%
Specialist provider 5%
Other 5%
How respondents actively support staff approaching retirement (above text)
Sample:All respondents that provide at-retirement support for staff (61)
They offer access to financial advice 61%
They use online modelling tools 36%
They offer staff the ability to draw down their pension 33%
They provide access to information via the organisation's intranet site 33%
They offer access to an annuity service through their pension provider(s) 31%
They run retirement seminars in the 12 months ahead of planned retirement 31%
They direct staff to Pension Wise 21%
They fund, or part fund, financial advice for staff 20%
They run a comprehensive communications campaign to raise awareness about the importance of saving for retirement and making informed decisions at retirement 15%
They offer access to an annuity service through another provider(s) 13%
They use phone app(s) 8%
They provide access to information via the organisations workplaces 3%
Other 8%
They do not know 3%
Employers want to help staff make informed decisions
Just under two-thirds (65%) of respondents that offer at-retirement support to employees do so because they want to support their staff in making informed decisions.
A further 53% do so because it's part of their culture, while a further 44% believe it supports their wider HR and strategic initiatives.
Supporting staff at retirement also has a number of advantages for employers. Two-thirds (66%) say that, regardless of the reason for offering such support, doing so positions them as a responsible employer and that they see this as part of their duty of care towards employees. Two-thirds also say that at-retirement support is part of their employee value proposition.
The provision of such support also has a number of other strategic advantages for organisations, including the retention of top staff, employee engagement, and succession planning.
Of the 43% that do not offer support, 46% do not have the budget while a further 45% do not have the resources.
Respondents attitude to supporting staff at retirement (above text)
Sample: All respondents that provide at-retirement support for staff (62)
They want to support staff in making informed decision 65%
It is part of their culture 53%
It supports their wider HR and strategic initiatives 44%
It is part of their desire to be the employer of choice 39%
It assists with smooth and positive transitions 31%
It supports their workforce’s planning strategy 24%
It supports their succession planning strategy 24%
It helps them to remain competitive 13%
Other 3%
Why respondents do not actively support staff at retirement (above text)
Sample: All respondents who do not provide support for staff at retirement (67)
They do not have the budget 46%
They do not have the resources 45%
It is the respondent’s pensions provider’s responsibility 22%
They do not believe it is their responsibility 16%
Other 18%
What respondents consider to be the key advantages of supporting staff in retirement (above text)
Sample: All respondents that provide at-retirement support for staff (61)
It is a valuable part of their employee value proposition 66%
It positions them as a responsible employer/they see it as part of their duty of care 66%
It helps them to engage staff 39%
It helps with their succession planning 33%
It helps them to attract the best staff 20%
It helps them to retain their staff 16%
It helps them to retain the best staff 16%
It is too early to tell 3%
They do not see any advantages 2%
Other 7%
Employees are concerned they do not have all the tools for retirement
More than two-fifths (43%) of respondents say their employees are concerned that they will experience a shortfall of money in retirement, while a further 41% say their staff are worried about how financially secure they will be when they retire. However, just over one-third (36%) say their staff are concerned they have not started financially planning for their retirement.
In addition, more than a third of respondents say their employees are uncertain about what to do with their pensions, while a further two-fifths (41%) cite concerns abut how to make the best best decisions when it comes to choosing how to take their pension savings, for example, whether to opt for an annuity, drawdown or lump sum pensions.
It is therefore encouraging that respondents appear determined to support their staff and equip them with the knowledge they feel they are missing.More than three-quarters (85%) of respondents are willing to put pressure on their pension providers to offer employees better education and support, and a further 83% will put pressure on pension advisers to do the same.
This is an ongoing priority for respondents with 57% saying 1-5% of their workforce will retire within the next 12 months and 37% and 31% that 1-5% and 6-10% of their workforce respectively will do so within the next five years.
The retirement concerns affecting respondents' workforces (above text)
Sample: All respondents (155)
Lack of money in retirement 43%
Concerns about their financial security in retirement 41%
Uncertainty about how to make the best decisions (annuity, drawdown, lump sum) 41%
Uncertainty about what to do with their pension savings 39%
Lack of a financial plan 36%
Concern about the cost of advice 25%
Do not know 24%
Uncertainty about how to save for their retirement 23%
Lack of knowledge of where to go for help/advice 21%
The end of their career 20%
The ability to provide for children and grandchildren 16%
Lack of access to guidance and support 16%
Deteriorating health 16%
Lack of purpose 12%
Lack of social interaction with their peers 10%
Other 3%
How respondents believe the provision of at-retirement support is likely to evolve in the future (text above)
Sample: All respondents (144)
More respondents will put pressure on their pension providers to help offer employees as much education and support as possible
Agree 85% Disagree 13% Not applicable 3%
More respondents will put pressure on their pension advisers to help offer employees as much education and support as possible
Agree 83% Disagree 12% Not applicable 5%
More respondents will want or need to offer this type of support
Agree 76% Disagree 18% Not applicable 6%
It will take time for respondents to boost their efforts given the relatively young demographics of their workforce
Agree 67% Disagree 20% Not applicable 13%
The sophistication of respondents’ approaches is dependent on at-retirement provider development and support
Agree 65% Disagree 24% Not applicable 11%
The majority of respondents will go above and beyond basic legal requirements
Agree 29% Disagree 70% Not applicable 1%
The proportion of employees in respondents' organisations nearing retirement in the next 12 months
Sample: All respondents (154) (above text)
None 25%
1-5% 57%
6-10% 11%
11-15% 3%
16-20% 3%
21-30% 1%
The proportion of employees in respondents' organisations nearing retirement in the next five years
Sample: All respondents (154) (above text)
None 12%
1-5% 37%
6-10% 31%
11-15% 11%
16-20% 6%
21-30% 3%
The proportion of employees in respondents' organisations nearing retirement in the next 10 years
Sample: All respondents (151) (above text)
None 5%
1-5% 22%
6-10% 28%
11-15% 22%
16-20% 12%
21-30% 7%
31-40% 3%
Over 40% 2%