The West Midlands Pension Fund is taking the next step towards paperless member communications by issuing its 2015 benefit statement online only, as more schemes move further towards digital portals to reduce costs.
Antony Ellis, communications officer for WMPF, said: “We’re only going paperless with benefit statements. We’ll still be sending normal letters. [It is the] first step to going totally paperless.”
It depends on the size of the scheme, but printing and mailing costs between £1 to £2.50 per statement
Daniel Taylor, Premier
The annual benefit statement is the biggest mailing carried out by the scheme each year, Ellis said. The scheme will stop issuing paper statements from April 1 2015.
Annual benefit statements will now be accessible through the scheme’s web portal, unless members submit a written request to the scheme asking for paper communication.
Earlier this year Pensions Expert reported that WMPF has increased online engagement 19 per cent by introducing an online portal, providing scheme information to members and employers.
The drive towards paperless communications is largely driven by a desire to cut costs.
Daniel Taylor, head of administration services at consultancy Premier, said: “It depends on the size of the scheme, but printing and mailing costs between £1 to £2.50 per statement. But of course the cost for smaller schemes is much higher because of the cost of time.”
Taylor added many schemes were looking to go paperless as a way of controlling costs. This can lead to problems, however, if some members opt for paper statements.
“Most people are trying to drive transactions online and via email,” he said. “The problems are when you have people who still want their paper copy because then the whole process is for a smaller number of members… You have two systems running at the same time.”
Other schemes, including IBM and Avon Pension Fund, have adopted paperless communication strategies. Avon predicted savings of £150,000 each year thanks to the switch, with £90,000 of these savings estimated from postage costs alone.
There is still a place for physical communications. Karen Heath, chief engagement officer at consultancy AHC, said pensions are often “out of sight, out of mind”, making physical communications such as posters effective for maintaining or improving engagement.
Heath added physical communication can still produce cost savings: “You can do it with much more fun and engaging communications like postcards,” she said. “[They are] much cheaper to produce than mail. You can get postage savings from making things smaller.”
Besides cost-cutting, online communications can improve member engagement by driving them towards scheme websites or online portals, where further information about the scheme is often held, Taylor said.
