Seven in 10 employees are not actively engaged with their workplace pension


More than seven in 10 (72%) employee respondents are not actively engaged with their workplace pension, according to research by Atlas Master Trust, part of Capita.

Its Why engagement needs a reality check white paper, which surveyed 200 pension managers, 200 senior finance professionals, 100 senior HR professionals and 2,000 employees, also found that 28% of employees never review their pension and try not to think about it at all, compared to 6% who considered themselves to be very engaged with their pension, regularly reviewing their savings and exploring investment options.

Three-fifths (61%) of employee respondents stated that they find pensions confusing, with 77% admitting that they do not understand enough about their pension in order to make informed decisions.

A further three-fifths (59%) of employees surveyed did not know how much they should be saving for retirement, 60% did not have a specific retirement goal and 74% did not understand the differences between pension arrangements, such as defined contribution (DC), defined benefit (DB) and master trusts. A third (34%) admitted to having no idea about the current value of their workplace pension.

Six in 10 (60%) employee respondents believed that the minimum contribution levels for auto-enrolment workplace pension schemes represent the amount that the government recommends they save for retirement.

Roz Watson, head of engagement at Atlas Master Trust, said: “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.

“This means a new approach to engagement, one that is highly 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.”

In order to gain a better understanding of how much more they need to save in order to have a comfortable retirement, 77% would like to see examples of what people like them have done with their pension savings.

The majority (96%) of staff stated that employers should be more transparent with them about pension shortfalls and the realities of retirement, while 68% felt that their employer could do more to encourage them to maximise their pension contributions.

Linked to this, 91% of HR and finance leaders and 93% of pension professionals acknowledged that organisations have a responsibility to provide more financial education for their employees; only 39% of HR professionals stated that they were very satisfied with their efforts to drive engagement with employees’ pension savings, while 90% felt they needed to be more transparent about saving shortfalls in their pension communications.

Watson added: “Employees are calling for a more pragmatic and honest approach from their employers when it comes to pensions; one that is based around the ‘Three Ts’, transparency, training and tools.

“There needs to be a clear separation between engagement and member communications. 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.”