UK organisations that actively engage employees in their pensions have found that they see stronger financial performance, according to research by Scottish Widows.
Its Retirement realities: unlocking the workplace benefits report, which analysed the views of 1,000 senior decision makers with pensions responsibility and 2,000 employees, also found that 64% of employers that take an active role in educating employees on pensions reported very good financial performance. In organisations that do not play an active role promoting pensions, just 18% reported an okay financial performance.
When asked what percentage of an employee’s salary is contributed to their pension by default, 41% that pay more than 8% into their employees’ pensions reported very good financial performance, while 19% reported an okay financial performance. Just 11% of well-performing firms provide the minimum 3% default contribution required under automatic-enrolment.
Nine in 10 (88%) of employers believe pension-related benefits and support are important to their organisation’s financial performance, with 91% finding it important for attracting and retaining employees in their sector.
Nearly a third (29%) of employees have left, or are considering leaving, their job, with 68% dissatisfied by the lack of competitive pension offering. A quarter (26%) cited low levels of communication and 21% cited benefits being difficult to access as their main reasons for being dissatisfied.
Half (51%) of respondents that offer healthcare benefits, 48% that offer extended maternity benefits and 39% that offer paternity leave above the statutory minimum see the best financial results.
Graeme Bold, managing director, workplace and intermediary wealth at Scottish Widows, said: “Workplace pensions are a powerful, yet often overlooked, way to shape employees’ long-term financial wellbeing. Our data shows that by investing in pension engagement, employers are not only supporting their employees’ future, but also unlocking stronger financial performance today. This helps to set the foundations for an engaged and productive workforce, which attracts and retains top talent.”
