Global technology organisation Siemens launched a pensions education strategy for its 15,000 employees in January 2019 to increase the number of staff that contributed to their pension savings.
Siemens found that, under its money purchase defined contribution (DC) pension scheme, 83% of its employees were predicted not to reach the Department for Work and Pensions' (DWP) target income model of £200,000-£250,000 upon approaching retirement. This was especially the case among younger employees. To increase the chances of employees having adequate funds to retire, the organisation worked with Nudge Global to create a pensions communication strategy.
Nicola Roche, reward partner at Siemens, explains: "We used the Nudge Global platform to send email reminders to staff. We created 26 different variations that we sent depending on a number of factors. We provided specific financial education tips tailored to their profile and current situation, which helped employees figure out how they would generate spare income to pay more into their pension savings."
The organisation's overarching strategy is to provide employees with a broader financial and pension education that is relevant to their current situation, be it age or lifestyle, and to understand how they can find spare funds to prioritise pensions. "It is easy to ask employees to pay more into their pensions, but very rarely do businesses say how to pay more, which is something that we introduced," says Roche.
Siemens also created a financial education section on Nudge Global's website for employees to access. Through this, staff can access articles, videos and infographics on how to improve their financial education and wellbeing.
Since introducing this pensions strategy, Siemens has seen a 30% increase in contributions by more than one-third of employees, while 80%-90% of employees are now on track to meet the DWP's pensions income target, with employee contributions increasing to 7%. In addition, the organisation has seen a 500% increase in employees accessing financial education information.
"To go from 83% not meeting their pensions target, to the vast majority [being] on their way to achieving this has been a real achievement in such a short space of time." concludes Roche.
