Articles - Pension freedoms a key opportunity for employee engagement


New flexibilities offer an opportunity for advisers and employee benefit consultants to engage with employers to improve member outcomes. The pension freedoms coming into force in April are not widely understood by employers and their employees. While the Pension Wise service will address some of these knowledge gaps for staff approaching retirement, employers and their employees are likely to turn to their advisers, consultants and providers for additional support. Angela Seymour-Jackson, Managing Director, Workplace Solutions at Aegon UK said:

 “Employers are still digesting the impact of the pension freedoms and the actions that might be required to support their workforce as they approach retirement. While Pension Wise is designed to help people understand their income options at retirement, no one is claiming it will address all guidance and support needs. A forty-five minute phone call or meeting, in the absence of other supporting detail, is unlikely to answer many of the questions people have about a complex list of financial decisions. Advisers and employee benefit consultants will have a significant role to play in helping employers and their members navigate these changes.
  
 “Employers are currently working out what they can do in the workplace to help staff while they are still in employment with simple and cost-effective information. As a pension provider we are in a great position to help advisers and employers with this. Our salesforce has the technical training to fully understand the changes in April and what they might mean for an employee’s tax situation for example.”
  
 Aegon believes that employers will need to support their members without straying into giving advice – in a cost-efficient manner.
  
 As a result employers are most likely to be attracted to bulk delivery mechanisms to complement and fill the gaps around Pension Wise - such as online communications, print, email and workplace onsite presentations.
 Seymour-Jackson said: “One to one engagement with members of staff around their options would be costly to the employer and therefore we expect it to be rare in the workplace. But some consultants already have benefits portals in place delivering guidance and information to the employee. For others, we expect a partnership to develop with the provider in which certain elements of the communication will be delivered by each party and the key will be to ensure these delivery mechanisms are joined up for the member.
  
 “While it is early days for approaches specifically driven by Pension Wise and the new retirement income flexibilities, we are currently developing digital tools with employers which can be used to deliver campaigns to the workforce to increase member engagement and improve member outcomes while also supporting employers in meeting their governance responsibilities. This could be in the form of an email campaign targeted at those members over a certain age, suggesting that they use a lifestyle planning tool to understand their income needs in retirement.”
  
 Aegon is gearing up to support both advisers and employers with member decision making as April approaches and will be launching a new website featuring an income planning tool and lifestyle calculator that will encourage employee engagement with their pension planning and provide a better understanding of their options at retirement.
  
 Seymour-Jackson said: “Creating a digital experience and stepping away from the traditional and often unengaging “wake-up pack” will empower employees to seek the best outcomes for them in retirement and equip them with the information they need to seek advice if needed.”
  
 Aegon’s new Retirement Income proposition will feature:
     
  1.   An income planning tool to help customers and advisers understand their options
  2.  
  3.   A range of investments tailored to at retirement customers
  4.  
  5.   Secure Retirement Income with guarantees to be integrated into platform for all customers
  6.  
  7.   The opportunity for customers in older products to upgrade to products that can be managed online
  8.  
  9.   Straight through processing which will mean no capacity crunch as customer demand for drawdown spikes in April 

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