Employers need to encourage members to contribute more than the minimum requirement by emphasising this in their auto-enrolment communication, a pensions specialist has said.

There is a "danger" that members could consider contributing less to their retirement if the pensions industry places too much emphasis on the minimum figures as good retirement provision, said pensions actuaries and administration specialists Spence & Partners.

But by emphasising the need to contribute more, this will help to avoid understating the true contributions required for members to achieve their desired retirement fund, said Spence.

Marian Elliott, Spence & Partners director, said: "Auto Enrolment is starting to look like the 'five-a-day' fruit and vegetable campaign. The government set the nutrition figure at five-a-day as it was felt that it was too much to ask for people to engage with the real required amount, which is around nine-a-day.

"Whilst this campaign has inevitably helped the overall situation on healthy eating, it is now so embedded as a figure that people do not seek to find out the amount they should truly be eating for a healthy lifestyle.

"So too with contributions. If the industry places too much emphasis on the minimum figures as good retirement provision, then members are less likely to consider contributing further to actually reach their pension goal."

Elliott said there is a "very real danger" that people will only feel the need to contribute the minimum of 3% towards their retirement, which is currently being communicated to them.

However in reality, Elliot said there needs to be a combined contribution rate from employers and employees of between 15% to 20% in order to cover the standard of living that people need and expect in their retirement.

Elliot said: "This is not being communicated currently, most likely due to constraints surrounding being perceived to be giving financial advice or the fear of scaring members into opting out. However, it is vital we get a more realistic ball park figure out there for people sooner rather than later."

She added: "Improved communication is going to be vital to the long term success of auto-enrolment and employers have a duty to invest in good member communications, with visuals and messages that speak directly to them in a way people can relate to. Only then might we have a population who is properly engaged with their pension and saving a reasonable amount."

First published 10.06.2013

monique_simpson@wilmington.co.uk