Dear Next Government.....

I’m not sure that pensions will be one of the major battle grounds in this election, and if it is, it may tend to be around the ‘triple lock’ headlines.

That would be missing the point. We need clarity form the next government in terms of the communication of pension plans. I appreciate the initiatives towards one design for future benefit statements, but the sooner the better.

Clarity on the future management and promotion of auto-enrolment is key. As is confirmation of state pension benefits and ages.

All this should lead to a harmonised approach to communicating pension benefits. Too many benefit statements have reams of small print. Most of it is legislative. Some of it is pension lawyers having too strong a say in the look and feel of communications.

It doesn’t help that we have the dreaded statutory money purchase illustrations. Loads of caveats. Tons of small print. So unhelpful.

Dear next government…. Please simplify communications. Cut the small print. Clarify the main figures. Help people understand.

The Daily Mail Fabricates News - Not so new news

The news out today that the Daily Mail fabricates news is not such new news. Working in the pensions industry, their regular pension headlines have been the bane of many a pensions manager.

The Mail had the ability to pick up on a half-truth and fabricate a complete story out of it. The results were usually concerned members of pension schemes panicking that they have the right plans in place.

The negative Mail headlines for pensions caused unnecessary grief and may well have stopped employees from joining a pension plan they should have been part of.

The poor journalism on display at the Mail has found them out.

Benefits that Drive Value

I met a Finance Director of a medium sized business recently. In our brief conversation, he made it clear he did not value the benefits his company provided to staff and saw them simply as an additional overhead.

If I’d had longer to talk, I’d have said more than I did. This is my follow up letter. (Not actually sent as I didn’t get his details!)



Dear Finance Director

It was good to meet you the other day.

I appreciate our conversation was a brief one, but if I’d had longer to chat, this is what I would have said….

I understand business is tough and from your point of view, additional benefits on top of salary are just overheads to be dealt with. But have you considered what you could do with those benefits at little extra cost to you?

Most employees don’t value their benefits either- mostly because employers don’t communicate them too well. I’m guessing that would include you- why communicate what you don’t value as a business manager? But the benefits all have value. The pension has matching employer contributions. That’s like free pay to your staff. Even the flexible holidays have a value, and the discounted affinity benefits have little cost to you but significant value to those who use them.

I guess I’m asking you to have another look at what you offer.  With the right communication, you can turn benefits from perceived business costs to providing a competitive edge for your company. Good benefits properly explained promote your business above and beyond your competitor who does not have those benefits- or does not bother communicating them. Small communication costs can provide a significant competitive edge, driven from staff wellbeing and a value well beyond the benefits themselves.

Benefits don’t have to be overheads. They can be your business case for future profitability.

Yours sincerely

The Left Hand Doesn’t Know What the Right Hand is Doing

This is an oft-used idiom with a Biblical foundation (‘But when you give to the needy, do not let your left hand know what your right hand is doing’: Matthew 6:3). In its original context, it’s used positively. But we’re talking  pensions here and I want to use it negatively!

Professional Pensions writes about the decision to have a number of different organisations dealing with pensions guidance. There’s TPAS, the Money Advice Service, a new offshoot of TPAS and a new directly controlled Treasury operation.

Three organisations and four delivery mechanisms.

Back to the quote. On the basis that there will not be enough resource put in place, how long before chaos ensues?!

Doing Things Differently

The headlines in today's Telegraph make sobering reading for those in the pension industry:

'I lost £150,000 due to Nineties pension sales frenzy.' 

This refers to the mis-selling scandal of course and tracks the story of one ex-soldier who was persuaded to transfer to a personal pension from the Armed Forces Plan. Disastrous results. And with many of those poor decisions reaping a poor pension, we will be seeing more of this in the press as people reach retirement.

'Pensions' doesn't have a great reputation anyway and these stories are not going to help. Warren Buffett said 'it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.' And we are doing things differently. But history and reputation are against us.