Darling, fetch the enigma machine!

By Matt Frost

In the past, we never had to worry about how the company pension scheme was communicated. HR and finance departments set the scheme up and managed the entire process. It was pretty much irrelevant whether or not employees understood what we sent them, because they weren’t expected to do anything except give loyal service to the company in return for the promise of a generous pension linked to their final earnings.

But things have changed. The paternalistic “don’t worry, we’ll look after you” approach is all but gone… replaced by less generous defined contribution/401k type schemes. And this requires a fundamental rethink of how we communicate pensions to our employees.

It is now on the employees’ shoulders to make sure they have enough money saved so that they can enjoy their retirement. It seems a simple concept – but how do you encourage someone to commit to putting some of their hard-earned cash into a savings fund that’s mind-bogglingly complex, constantly receiving negative press coverage and comes with no guaranteed return?

Most people don’t know what money they’ll need for next month – so quite understandably, they need help planning for retirement which might not be for 40 years or so!

There is no magic potion. You can’t make a pension a sexy subject – and nor should you try. Employees need to know that saving for retirement is serious. These 7 tips will help you to position your company scheme as a valuable benefit that employees can and should use to their advantage.

1. Start with the basics

We aren’t taught about pensions and retirement planning at school, so start at the beginning. Make sure your audience understands the basics – why they need a pension, how much it costs, what the company offers and what they are responsible for.

2. Make a stand for communicating well

Don’t send anything out that you don’t fully understand. Your communication will undoubtedly have to be checked to make sure it is technically and legally correct – but don’t use this as an excuse for sending out bland, lifeless documents riddled with pages of words no sane person understands.

Get close to pensions people, lawyers, actuaries and HR in your company – they won’t bite. Work with them to establish what needs to be communicated and why, then find ways to add personality to these messages.

3. Get creative

Use all of the communication channels available to you, but don’t just go with the latest fad because it’s new. Find out how your employees want to be communicated with about their pension – their feedback may surprise you.

That said, regardless of the channel(s) you use, a message about pensions is always going to be pretty high up on the “boring” list. Add to that estimates which suggest we receive up to 3,000 messages a day (through adverts, radio, TV, internet, email etc), and you will have to fight to get your message through the surrounding ‘noise’!

Before you send anything out, put yourself in the employees’ shoes. Which one would you pick up and read?

Striking design (like the color brochure above) will catch the employee’s attention.

But it’s in the content that you really have to get creative – and personal. (See below).

4. Make it personal and relevant

People want to read about things that are interesting, engaging and that connect with them on an emotional level. Use real-life case studies – emotional stories from happy employees who took control and planned ahead, and distraught employees who didn’t save and now can’t afford to retire.

You should also make the most of the raft of data and information you are likely to have about each of your employees.

Breaking your audience into categories (i.e. employees paying minimum contributions, those paying more, under 30s, over 50s) will give you a clearer, more useful picture of who you are communicating with. We are all different, and breaking your audience into specific groups will mean that you can target your messages more effectively.

You can then personalise these messages to make them relevant to the reader. But I don’t just mean scattering a few random pieces of data onto a page. Personalised messaging like “Matt, if you had joined the pension scheme last year, you’d have saved an extra $360 through company contributions” engages at a tangible and personal level and helps employees make good, current choices.

In fact, “Matt, because you didn’t join the pension scheme last year, you have LOST out on $360 from the company” is a far more powerful persuader and links to my next tip…

5. Be real, not aspirational

Most people are overly optimistic about the future – which is particularly dangerous when trying to encourage someone to save now into their pension. Generations X and Y genuinely believe in romantic strategies like "I'll be fine, I'll win the lottery one day" or "I'll marry someone rich" – whilst older generations rely on the equally misplaced optimism of "I'll be alright, my employer will look after me” or “I’ll get loads of money when my parents die.”

Avoid stereotypical headlines and clichéd images that play into people’s misconceptions.

Employees must realise that, unless they save, they could spend up to 30 years in poverty. To jolt people into action, use messages and imagery that reflects this. Saving for retirement isn’t easy – but is necessary for survival, or at least, quality of life in retirement.

But don’t leave employees feeling helpless or despondent. Follow up by making the topic more accessible by talking about contributions in monetary amounts and explaining that, even small steps like ‘one less pint at the weekend’ or ‘one less takeaway branded capafrapamochachino a week’ can make a difference to their overall pension.

6. Counteract short-term thinking

If I offered you $100 now or the promise of $110 in a year’s time – what would you go for? Personally I’d go for the quick and easy $100, and research shows that I’m not alone. We have an engrained ‘have it now’ mentality which paying into a pension goes against.

Employees are more likely to confidently save into their pension if they have short-term targets to focus on. Work with your audience to set targets that are appropriate and realistic to their lifestyle now, but are designed to improve their overall pension in the long-term – for example, “I want to save an extra $4,000 over the next 3 years.” These should also be linked to "well done" messages when a target is achieved and words of encouragement if a target is missed.

7. Build trust

Despite your best efforts, you have to recognise that pensions get battered by the media – every day! If it’s not another company making benefit cuts, it’s “little old lady loses her life savings”…

Your employees aren’t immune to this negativity – and your communication has to help them overcome it.

Be positive about things like the company’s contribution rate, tax advantages and flexibility. But don’t be afraid of sharing bad news. Employees will quickly see if you are trying to pull the wool over their eyes to hide the truth. They may not like the truth, but they’ll respect you for being honest and will see you as a reliable source to help them make informed decisions.

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Why bother doing any of this?

There is an argument that says – if it’s the employee’s responsibility to save, why should the company help them? I believe there are two main reasons why a company should invest more (in time and effort, not just money) in how it communicates pensions. I’ll leave you with these thoughts:

- A well-communicated pension plan leads to a well-understood pension plan. If employees understand it, they are far more likely to appreciate and use it to their advantage which helps with levels of retention and engagement.

- A recent study revealed that employees who receive targeted, personalised pension communication saved 2% more than those who did not. Raising employer matching contribution rates achieved the same effect – but at a considerably higher cost to the business.

Don’t leave your employees in the dark, decrypt the secret messages. Your role as the communicator is to be the enigma machine!

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About Matt Frost

Matt Frost is a passionate communicator who believes in pushing the boundaries to create communication that engages, educates and inspires. Matt is a Director at SHILLING Communication – a leading provider of pension and benefit communication. SHILLING provides a full range of communication services, including copywriting, creative design, multimedia development, personalisation and segmentation, and integrated project management.

To find out more about Matt and SHILLING visit www.shilling.co.uk