Employers have a responsibility to educate employees about the benefits of contributing to a defined contribution (DC) pension scheme.
Speaking on the topic of DC – a new problem in the making? at the NAPF Annual Conference & Exhibition 2007, Andrew Dickson, corporate client development manager at Standard Life, said too many employers do not take the opportunity to help staff understand the value of DC schemes.
“Communicate and educate, make it an intrinsic part of the culture of the organisation. Employers have a responsibility for the financial wellbeing of employees,” he said.
This communication will enable employees to build up a better knowledge of what their current overall individual wealth is, and what it is likely to be at retirement.
Chris Curry, research director at the Pensions Policy Institute, added that, in many cases, employees do not see a DC scheme as being the only source of financing their retirement. Property and other saving schemes such as an individual savings account are being used by employees to compliment DC schemes.
“Pensions may not be the full story, you don’t have to get everything for retirement from a pension scheme,” he explained.