Daniel Barrow gives 'a millennial's perspective' on pensions
The seismic shift to DC has seen millions of members thrust into the pensions driving seat, many of them careering blindly towards an uncertain retirement. That's why it's never been more important to effectively engage the DC generation.
But, whose responsibility is it?
In order to achieve positive outcomes within a DC system, the member has to take some degree of control. However, we can't just hand members the keys and expect them to head in the right direction without a map.
Planning for retirement isn't straightforward. It's vital to engage members, educate them on their options, and empower them by giving them the right tools to make the important decisions for their future.
Should this responsibility fall to the Government?
They definitely have a vested interest in a financially stable retired population who are less reliant on the State, as well as arguably a moral duty.
Recent campaigns around auto-enrolment and Pension Wise have certainly gone some way in raising the profile of pensions, but more needs to be done to ensure members are putting enough away.
Ultimately, in order to really strike a chord with members, engagement must start closer to home.
Workplace pensions are the most common vehicle for retirement saving. As such, employers are often an employee's first point of contact with pensions and, along with scheme trustees, certainly in the best position to influence attitudes on saving for retirement.
As pension benefits can often make up a significant part of an employee's overall package, it is also in the employer's interest to engage their employees and help them to appreciate this valuable benefit.
In an age where it is no longer possible to dismiss someone on the grounds of age, employers need to make sure their employees can afford to retire.
Key to engagement is clear, personalised and segmented messaging that talks directly to the individual, delivered via media the member is used to consuming.
We need employees to pick their destination and understand what they need to do to get there.
The individualistic nature of DC means that the road to retirement looks different for everyone and to maximise engagement, a member-centric approach needs to be at the forefront of employers and their scheme trustees' thinking.
Daniel Barrow, Communications Consultant (and millennial), AHC.
