DC: The New Investment Journey. Health and beauty group Alliance Boots is launching a new website to get messages on pension changes out to staff at its eight UK employers, and is planning to ditch paper-based booklets to offset the costs.
Electronic communication is becoming more widespread as it saves costs and provides information quickly and clearly to scheme members, but some industry experts warn relying solely on it it may disenfranchise certain members.
A panel discussion during Wednesday’s defined contribution investment forum highlighted the challenges schemes face in communicating the changes from the Budget in a transparent, straightforward and cost-efficient way.
Julie Richards, group director of pensions at the company, said it was now getting a comprehensive website in place to avoid having to rely on the ‘cascade’ method – letting communication filter down through its different employer entities – to get the message out.
“One thing that the Budget showed us – there wasn’t a quick way of communicating to our eight different employing entities with a consistent message in a timely fashion.”
Member engagement has long been an issue for DC pension schemes, despite the fact employees bear far more investment risk on their shoulders compared with a defined benefit structure. Only 3 per cent of Alliance Boots’ DC scheme members are currently managing their account through their workplace portal.
The company is now moving its communications away from print media. “If people want the information, they will have to go to the website,” Richards said.
She told delegates the money saved by abandoning printed booklets and papers will fund the website and its development to make it more interactive. “The first stage is just getting people used to going to [the website] to get the information.”
To avoid the threat of members being left out by communicating exclusively online, Richards said the scheme is working with its HR department and individual businesses. Store managers will be on hand for those who cannot or do not want to use the website.
Alex Thurley-Ratcliff, head of research and innovation at communication company Shilling, said it was not enough to simply build a nice website. He added: “You have to drive people behaviourally, you have to get them engaged at a heart and mind level first.”
Thurley-Ratcliff said it was important that communication strategies use more than one channel, adding: "You cannot disenfranchise your audience by assuming they have access to technology.”
Clive Gilchrist, deputy chairman at professional trustee company Bestrustees, told delegates: "The problem is that we're now trying to tell them about something that was in the Budget – a lot of these people don't even know there was a Budget."
He is also a trustee at the Kingfisher Staff Pension Scheme, which recently developed an app for members that combined a video game with information about the pension scheme, in an attempt to engage people with their retirement savings.
