Seven out of 10 employees (70%) do not monitor or make changes to their defined contribution (DC) pension fund on a regular basis, according to new research from Shilling Communications.
The Shilling Communications: Pension Snapshot, carried out by YouGov, found that of the employees that do not monitor their pension, almost half (47%) assumed that matters were looked after on their behalf.
Many respondents stated reasons relating to a lack of understanding, i.e. “I don’t understand what is required of me” (26%), and “I don’t know what I need to do” (23%).
Katie Frost, director at Shilling Communications, said: “There seems to be an assumption amongst workers that their pensions are being looked after for them, which might have been the case with defined benefit (DB) pension schemes, but certainly isn’t the case with defined contribution (DC), where members bear the risk.
“In a Shilling poll carried out last year, educating pension scheme members about defined contribution (DC) was voted the biggest communications issue for 2011, and it is essential that DC pension schemes are effectively communicated if we are to put a stop to this ‘head in the sand’ mentality, and improve engagement within the industry.
“In many instances member communications simply aren’t working, as the DC message clearly still isn’t getting through.
“Trustees, as part of their commitment to good governance, mustn’t underestimate the importance of investing in effective communications that are appropriate to their scheme’s members.”
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