How To Make Sure Your Employees Don’t Ignore Their Auto Enrolment Workplace Pension
Whether a corporate pension was offered to them previously or not, the arrival of Auto Enrolment means that almost all employees will now (or very soon) be part of a workplace pension. Getting staff interested in that is, however, a major challenge for employers.
Low opt-out rates have been common across all industries during the implementation of automatic enrolment, yet that may not necessarily be because all employees think an auto enrolment pension scheme is a great idea and something they want to be a part of. Rather, employees may have completely ignored the communications given to them instructing them about the option to opt-out.
Particularly at this early stage in the auto enrolment process, many employees will have hardly noticed that auto enrolment has even taken place. With just 1% coming out of their salary, few employees will be feeling the effects as of yet.
That could all change in an instant, however, specifically the instant of October 1st 2017 when the total minimum contribution rises to 5%, with the minimum employer contribution rising to 2% - thus leaving some employees to pay 3%.
That is when staff might begin to take notice of their auto enrolment pension and for employers a major challenge is preventing a wave of opt-outs in October of two years’ time.
Communication is going to be a key part of that process, but how can employers effectively communicate all there is to know about auto enrolment when previous attempts have fallen on deaf ears?
Premier Coffee is one company that typifies the auto enrolment experience of many. Speaking to Pensions Expert recently, Finance Manager Sharon Gibb said that the company had not received a single enquiry regarding auto enrolment even after setting up a dedicated email address, sending out newsletters and hosting seminars.
“We were expecting a lot of questions from employees but we haven’t had any,” she said. “We’ve had a few notifications through Nest of maybe a couple of opt-outs, but otherwise we haven’t had any questions.”
One such way that companies like Premier Coffee could get the message across to staff is to host workplace financial education sessions. For some companies this might be a challenge given that not all staff in each store will be eligible for automatic enrolment, but if companies are serious about engaging with staff about their auto enrolment workplace pensions then this is one possible solution.
As Punter Southall’s Neil Latham said, “Auto-enrolment was done to them, they didn’t participate.”
That might be the main reason for such a lack of engagement thus far from employees. Financial education could be a first step to increasing that participation.
Photo credit goes to overgreame