Articles - A Light Bulb Moment


Recently, I heard one of my colleagues raving about the great communication he’d received from the energy company Bulb. If you look on Bulb’s website (and at its personalised statements), it leads with its green credentials. Critically, it does so in a language and tone that the average person in the street can understand. Its statements also help you to assess if you’re on track with your energy payments.

 By Rona Train, Partner Hymans Robertson

 “By going green, the average Bulb member lowers their carbon impact by 3.4 tonnes of CO2 a year. That's the hard work of around 1,689 trees.”

 It’s a great message. By selecting Bulb, I’m (at least to some extent) “doing my bit” on climate change. I also know, from my annual statement, what exactly that means for me as a Bulb customer.

 How do we apply this to the pensions industry?
 It got me thinking that we, in the pensions industry, have a lot to learn from this type of down-to-earth - and directly relevant - communication in engaging our DC members in their pension savings. Let’s face it – the things we’ve tried to do so far haven’t worked; engagement in pensions remains worryingly low. I dread to think how many trees have been felled over the past 20 years to print pension communications that have gone straight into the “pensions drawer”!

 But we now have a new and exciting way to engage our members, using the same techniques that Bulb has done in the world of energy; by tapping into the fact that they care. It's good to tell a member that their pension is on track to deliver their retirement benefits. But it’s even better to tell them, for example, that the firm looking after their pension savings is using the power of their money to convince Shell to link executive pay to carbon emissions. That’s going to make people sit up and take notice.

 In the recent research by the DCIF, 65% (up from 56% in 2018) of those surveyed said they would have more trust in their pension and 50% (up from 40% in 2018) said they would contribute more to their pension if they knew it was invested in a responsible way. While there will understandably be some positive bias in these numbers, just think of the impact this could have. Could this finally provide us with the holy grail of DC pensions - better engagement and improved member outcomes?

 External pressures
 Pressure is coming from outside our industry too. Research from the Edelman Trust Barometer from earlier in 2020 showed that brand trust is now one of the biggest factors in people choosing where to buy from; for example, 71% of respondents said that brands placing profit before people would lose their trust. Initiatives such as Make My Money Matter (which is seeking to encourage pension scheme members to challenge fiduciaries on where their pension money is invested) are poised to gain increasing traction – and not simply because they’re fronted by Richard Curtis of Love Actually and Blackadder fame!

 Technology firms such as Tumelo are seeking to get members more interested in the issues their managers are voting on – and for the first time, having their voices heard directly on key ESG issues. Hymans Robertson’s own Spark Pensions, which launches next year, will allow UK pension savers to easily move their money into a climate friendly place and see their impact on the environment. This is already attracting significant attention amongst savers.

 Boohoo, Sports Direct and Wetherspoons (amongst others) have suffered severe reputational damage due to the way they acted during the COVID-19 crisis. I believe that DC savers will increasingly want to know what pressure is being put on these companies to improve their long-term practices. Knowing their pension savings can influence this is a brilliant way to get them more engaged.

 Walking the walk
 The right kind of reporting is critical though. It needs to be short and impactful. We’ve been working with our communications and engagement partner, like minds, to develop pension reporting for DC members that they will actually take an interest in and read.

 And we’re not just talking the talk – we’re walking the walk too. We’re in the process of introducing a new ESG tilted strategy for our own pension plan at Hymans Robertson and one of the key things we’ll be doing going forward is reporting to our members on a range of ESG measures, such as the carbon emissions of the default strategy and positive stories on the good their pensions savings are doing.

 This is definitely a lightbulb moment – and one that could bring a brighter future for all our DC members.  

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