Understanding investments and keeping employees financially focused on their workplace pensions are among the ongoing challenges for today’s employers.
Benefits Expert gathered together industry experts to discuss the key pensions challenges facing today’s employers.
Defined contribution (DC) pensions continue to thrive despite the seemingly constant turbulence the global economy. For employers and HR professionals, the challenge is in keeping employees engaged with their schemes at a time when their financial priorities are likely to be on the bills that need to be paid today, rather than saving for the future. While pensions is still a factor in overall financial wellbeing, employers should understand that the current economic situation has meant it is not currently a priority for many employees.
It’s also important for pensions communications to be simple, accessible and engaging so that the workforce is able to understand what it happening to their retirement savings.
In terms of selecting a pension scheme in the first instance, there are a number of factors to consider beyond just the cost implications. While it was understandably the overriding factor in making a choice, employers also value the app on the platform, the engagement and the fund selection, and wouldn’t necessarily switch to something cheaper if it was less engaging or less accessible.
From a diversity perspective, it was proposed by delegates that the pensions industry should do a lot more to engage with different communities in the workplace. Attendees were also in general agreement that one of the next big conversations in pensions is and environmental, social and governance (ESG) and that an agreed unit of measurement would be useful as new generations of employees entering the workforce were becoming more passionate and engaged with these issues. It was agreed that pensions have a part to play in helping with climate change and reducing carbon footprint, so will definitely be a factor in the future.
The DC pensions roundtable covered in our supplement highlights the views of a number of industry leaders on how best to manage the challenges faced by today’s employers in this area. It is an issue that needs to be addressed to prepare employees for retirement as they emerge from the financial burden imposed by the cost-of-living crisis.