Engaging younger employees with pensions and the importance of saving for retirement has long been a challenge for employers, and for that reason a key part of their pensions strategy planning is education.
Founded in 2016, WestSpring IT provides IT consultancy and support services to businesses across the UK and has a team of 35. Emma Carter, chief executive officer (CEO), says: “Part of our five-year strategy is reviewing our total benefits package, which includes pension provision. Interestingly, when talking to our employees, whose average age is 27, we find they don’t view pensions as part of their benefits package; their focus is more on the fun stuff. And although a number of people have increased their (and our) contribution up to 10%, take up of this is low.”
Recent in-house surveys and financial workshops have revealed, that with cost-of-living pressures, including high rental costs, saving for deposits, and young families, the focus for staff is on their end-of-month take-home pay. “They see pensions as a future problem, with lots of time to address it,” Carter says. “A key goal for our pensions strategy, therefore, was achieving a balance between employee needs, talent retention, costs, and education.”
The organisation currently offers its auto-enrolment pension scheme through The People’s Pension but it is exploring options to change providers next year. “We are keen to find a provider that could help us introduce an enhanced scheme, but more importantly, help educate a young workforce on the importance, balance, and benefits of pension contributions at a young age,” says Carter.
It was also recognised that within its highly qualified and professional workforce were a small number of employees at the higher tax rate. With more than 50% of staff predicted to be in that bracket within the next five years, the employer has identified a need to review salary sacrifice provision, which is not currently available.
Carter adds: “As business owners, in the current climate, there are choices to make about where and how our time is focused. As much as I want a pension scheme that is valued and recognised by our people, their own priorities are very different, so I feel education is an absolutely critical part of the pensions strategy.”
