As the United Kingdom looks ahead to the Chancellor’s Autumn Statement, and the potential for greater clarity on his proposed Mansion House reforms, it is important not to lose focus on how these reforms would require an increased focus on member education and engagement.
What will the reforms mean for the ‘experience’ you provide your members?
Overall, the Mansion House reforms present “a golden opportunity to improve outcomes for UK pension savers”. It highlights the need to provide the right resources and educational support to help individual savers better interact with their pensions day-to-day and to see the benefits of making choices that are right for their personal circumstances.
Creating a comprehensive experience for all members
As and when the Mansion House reforms come into effect, there will undoubtedly be an increased focus on pension scheme trustees and providers to demonstrate they are offering members the required guidance to make informed savings and financial planning decisions throughout their careers through to end of life.
But why wait? We can and should start now. Pension scheme members are notoriously difficult to engage in pensions – for many reasons. According to a report on understanding member engagement, published by the Department for Work and Pensions (DWP), fear was one of the main reasons preventing people from actively engaging with their pension.
Getting ahead, by reviewing your member engagement, can help plant the seeds of change – to tackle this fear and build a membership that is more engaged and better informed of the huge tax efficient benefits of investing in a pension over the long term.
But where to start? With finite resources how do you prioritise?
According to WTW’s 2023 Defined Contribution Pension and Savings Report, member experience is the foremost current priority for plan sponsors (79%), pointing to an increased focus on member outcomes over the near term.
At WTW, we have years of experience analysing data and research to help provide the insights needed to design and implement effective experiences for members, to drive the outcomes savers need.
Here are the top five things we think schemes should focus on:
Member listening
The foundation of an effective communications strategy starts with comprehensive member listening that helps uncover the main pain points.
You can harness the power of members’ voices to help you improve; by understanding what’s working well, what’s not and what needs to change.
The bottom line: Member insight creates a better experience which in turn creates better member outcomes.
Strategic planning
Deciding on your ‘why,’ ‘what’ and ‘how’ is key to achieving your goals in a timely and efficient manner and the key to unlocking improved member behaviour.
It’s tempting to jump straight into creating great communications, which is of course essential to engagement. But defining your purpose and working out why you’re writing, what behaviour you’re aiming to shift and how you can measure it is the place to start.
With the Mansion House reforms ahead and the possibility of more options for members, there’s common strategic aims which are important – like making sure members have the ‘right’ support in place to make their retirement choices and managing any residual funds throughout retirement to end of life; as well as being easily accessible at the right time and in the right way.
Digital footprint
Over the years, UK pension schemes have had to navigate a series of major crises, so having a digital footprint is key for communicating with members instantly.
The crises schemes have faced in the last few years (Covid, LDI, cyber threats) has shown that having a website for members as a trusted source of information is vital. Going paperless also supports net zero targets.
If you haven’t already taken the step to provide a website for members, where do you start and what is the strategic purpose? Although all schemes are different, there’s some common ground such as: providing active and deferred groups with cost effective education around investments and retirement options, driving a digital experience to complement administration service delivery, and supporting members through change.
Because there’s common ground, we’ve developed high quality content throughout membership that's easy to implement, such as actions to take in your first three months of membership, staying safe online, financial wellbeing, dashboard support and retirement options.
Regular reminders
Once you’ve agreed your strategic messages, the next step is to maintain a regular stream of communication to encourage members to take required actions.
In our research we found that members like helpful reminders. “Don’t forget to fill in your nomination.” “We noticed you’ve hit the £50,000 savings mark.” “You’re in the default investment fund, is that right for you?”
Message repetition builds familiarity, trust and commits to memory. Maintaining a regular stream of communication can encourage members to take desired actions - that are in their best interests and those of the scheme’s. For example, sending a personalised email directing members to important scheme documents or educational content can build the motivation to help them better understand their pension.
Focusing on the topics
Focus on topics that will make the most impact and increase member awareness and understanding about managing their savings according to their personal circumstances.
It’s not just about delivering member information, but also building trust and confidence so members make well informed decisions about their savings.
Increasingly, as the defined contribution market matures and more savers take their money, tax planning and ongoing investment management is a priority.
Do you have enough in place to educate members about the opportunities to maximise tax efficiency?
Can members access the right tools to continue to manage their investments throughout retirement to end of life?
Are you doing enough to help new joiners and savers to maximise their opportunity to build wealth?
This involves going further than providing pages of content that doesn’t peak members’ interest. Content needs to be engaging, creative, easy, and fun!
We create a variety of high-quality materials including educational videos, infographics, interactive tools, and modellers, to help enhance member engagement and awareness around member benefits and options at retirement. We member test and measure the effectiveness to enable schemes to make the right decisions about where to focus or prioritise.
Overall, while the industry waits to see if and how the Mansion House reforms will be implemented, it is essential that pension scheme trustees and providers do not lose focus on continuing to improve the experience for members. Our collective purpose is in providing post-employment benefits to members at an affordable cost and risk to plan sponsors. Building member clarity, confidence, and control is needed to safeguard them in making better, more informed savings decisions.
