Interview With Reward Guide’s Assistant Editor Helen Swire
We caught up with Helen Swire, the Assistant Editor at employee benefits publication Reward Guide, for a chat on how HR and pensions can work together, the impact of the UK’s pension reforms, automatic enrolment and more.
You recently wrote an article in which you referred to Mark Rowland of Mercer’s comment that “The pensions industry and HR must work together to get the right employee outcomes.” In what ways can the two work together?
Helen Swire: Employees making the right decisions for their pensions savings does not just come down to the pensions industry – it’s about HRs understanding what their staff can do with their money and then communicating it to them. It’s also important that employees understand their savings throughout their entire lifecycle, not just at retirement, and workplace communications should reflect that.
In turn, the pensions industry needs to ensure that the choices employees can make with their money are easy to understand, that the system is easy to navigate, and that compliance is as simple as possible for companies to achieve.
More and more people now want to reduce their hours rather than retire overnight. How do you think HR departments can help employees to do that?
Helen Swire: There are a lot of concerns about physical jobs such as manual labour leaving employees without choices when it comes to retirement. HRs can look to invest in training and development of older workers to bring out new skills – and retain the ones their workforce already has. Mentoring and development of younger workers is also a role that older generations in the workforce can fulfil with their collective years of expertise.
There have been a number of reforms announced already for the UK’s pension industry, which come into force next year. What do you think pensions will look like in 20 years time?
Helen Swire: It is difficult to say how pensions will look in 20 years’ time – even as far as 2015 there are question marks over elements of the industry. With the new freedoms for those retiring hitting the market in April 2015, we don’t even know what the picture will be, for example, for the annuity market. Did the Budget changes signal the death of annuities? Or will annuity providers come up with ever more alternative solutions?
We can predict what people intend to do at retirement with their new freedom – but we still don’t have any hard facts. Whether they will actually withdraw their pot to buy a Lamborghini remains to be seen!
Auto enrolment has been the talk of the pensions town for the past couple of years. Would you rate it as a success so far?
Helen Swire: So far, like most people have argued, auto-enrolment seems to have been successful. Many of the organisations that have auto-enrolled have done so without too many complications and have remained compliant. It has also raised the profile of pensions and the importance of saving for retirement – and in general – to a much wider audience, and has opened more conversations about the bigger employee benefits picture: both of which are important in terms of the overall success of the venture.
What do you think the biggest remaining hurdle if for auto enrolment to be classed as a complete success?
Helen Swire: The SMEs yet to enrol pose the biggest hurdle in the auto-enrolment process. Auto-enrolment has been relatively smooth thus far, but that’s easy to say for large companies with the finances and HR/payroll resources to manage it. Smaller companies may struggle to find the advice and guidance they need to auto-enrol and remain compliant, and there are still concerns around a potential ‘capacity crunch’ in this area – particularly as over-stretched HR departments are also dealing with changes to healthcare and childcare policies.
And companies of all sizes must remember that while auto-enrolment itself is a short-term process, it is part of a much longer-term thing – you can’t just breathe a sigh of relief when it’s done, as there are ongoing issues around governance, compliance and financial education.
Where can employers find out more about the challenges they face?
Helen Swire: Events such as Reward Live (13th & 14th May 2015, at Edgbaston Cricket Ground, Birmingham) bring employers, industry experts and providers together to discuss the challenges not only in the pensions industry, but in the wider employee benefits space. Reward Live 2015 will happen straight after the general election, and so will be the ideal platform to ask questions and debate policies!
You can see the latest thoughts, insight and articles from Helen by giving her a follow on Twitter at @RewardHelen.