Need to know:
- Change will happen when it comes to employers’ pensions plans. Whatever the change, some universal principles remain true.
- Stakeholders should be involved early, to ensure they can voice any objections and feel involved in the process. Avoid legalese; be honest, clear and concise. If it is bad news, upfront about why the decision is being made and explain the reasoning behind it.
- An employer should really get to know the audience of employees and meet them where they are. Do not underestimate the amount of time and planning involved in a good communications campaign.
Change is inevitable, as organisations shift and adapt to the world around them. In many situations, it is good news for employees. But when change happens in areas that are not well understood, like pensions, people can sometimes assume that any news is bad news. That is why it is vital for reward teams to carefully consider how changes are communicated.
Whether employers are choosing to move their defined contribution (DC) pension schemes to master trusts, adjusting contribution rates or moving defined benefit (DB) schemes towards buy-ins or buyouts, some central principles remain consistent.
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Start communications early
When an employer is thinking about making a pensions change, it must loop in involved stakeholders, such as trustee boards, early. That way, they will feel more involved, and can address any objections early on in the process, says independent trustee Louisa Harrold, a client director at Zedra.
“Before [employers] even start talking to employees, there is an awful lot of internal buy-in which is needed at different levels,” she explains. “[They] want all [their] senior people to be on board, regardless of whether they are a decision maker or not. The other key stakeholders are the people who are heads of different bits of the business, people who take on critical managerial roles. [Employers] want to make sure not just that they know about the changes, but that they believe in the benefits.”
Being upfront about bad news is vital. Martin Tiplady, director of Chameleon People Solutions, says: “Explain the need for the changes, and tell the truth. If contribution levels need to increase, [employers] could say something like: ‘Right now, the world is in a difficult place and any investment is not going to pay back what you thought. To make sure the value for you is going to hold up, we need to change the contribution levels and we hope this will replenish the situation.’”
Employees will appreciate honesty, he adds.
Karen Quinn, director of Untamed Marketing, adds: “Give context.” If, for example, pension contributions are being cut because profits are down, an employer should explain that it is making this difficult short-term decision so that people can keep their jobs.
Get to know the audience
Cath Collins, senior writer at communications consultancy Quietroom, says: “Some of the best work we’ve done is when we’ve ‘gone native’. Really get to know scheme members: that could be listening to calls in a call centre to better understand the pressures people are under, or putting something in front of them and asking, ‘What do you take away from this?’”
For Tiplady, nothing beats a face-to-face conversation to build up support for change. “The best people to convince [an employer] that what the organisation is saying is sincere is [a] colleague, not [a] boss,” he says. “I rely on the fact that if somebody attends a meeting who is a colleague of others, [I] can say: ‘Can you do me a favour? Can you tell your colleagues what is happening as well and encourage them to attend a physical or virtual event?’”
Communicating via a variety of channels is important, so that everyone is reached, says Harrold. “Don’t just put a message on [the] intranet, send an e-mail or write a letter. [An employer] wants to be doing all those things, getting the message out in a consistent way so employees have various opportunities to engage with the material. Keep it positive and focus on what’s in it for the members.”
If an employer is moving employees to a master trust, it must not forget that it is also likely to have great engagement tools which can be used. These could include introductory webinars, pension calculators, and other financial wellbeing resources, such as budgeting tools.
Harrold has also seen an employer where a workforce did not all have e-mail addresses communicating key messages on payslips: ‘Have you seen your pension is about to change?’ With details of where to look for more information.
Independent sources of support
Employees may well feel less self-conscious asking an independent person about their pension. Perhaps that is someone who works for a financial education charity like the Money and Pensions Advice Service, or, if budget allows, a financial adviser.
Another way to help people feel less embarrassed about asking questions is to appoint what Quinn calls ‘Pension Pros’ within a workforce. People are more likely to feel comfortable quizzing them than a senior leader.
Collaborate with lawyers
Lastly, employers must remember that sometimes change comes with legal implications which must be built into a communications timeline. To avoid communications in legalese, Collins advises that all the different lawyers or stakeholders are gathered together for employers to understand exactly what their needs are.