Government revives Pensions Commission as 15 million workers undersave for retirement<\/a><\/p>\nKatie Elliott, director at consultancy HR Katie, said pension schemes can be \u201cset up once\u201d by employers to meet legal requirements, only for them to be \u201cforgotten\u201d afterwards.<\/p>\n
This problem, which is especially prevalent in small businesses, occurs when pension administration is sat with an external entity such as an accountant or broker, rather than being \u201cowned internally\u201d, she added.\u00a0<\/p>\n
\u201cIf there\u2019s no one clearly responsible for it, it drifts. It’s rarely deliberate neglect, it [pension administration] is just not urgent until it is,\u201d Elliott warned.<\/p>\n
A lack of knowledge and skills among employers, particularly those dealing directly with pension providers, can sometimes also contribute to schemes going unchecked, said James Biggs, partner at consultancy Employee Benefits Collective.<\/p>\n
\u201cThe employer may have also grown to a size where the original pension is no longer competitive or the right fit,\u201d he explained.<\/p>\n
Outdated schemes carry risks<\/p>\n
Failing to regularly review pension arrangements could carry risks, said Elliott. \u201cThe biggest risk is that employees end up in a scheme that\u2019s quietly underperforming, whether that\u2019s high charges, poor fund choices or weak member support, and nobody notices until it’s a real problem,\u201d she added.<\/p>\n
\u201cPension is part of your reward package. If you\u2019re not checking it still stacks up, you could be paying for a benefit that isn\u2019t actually landing as one.\u201d<\/p>\n
The research also found employers consider a range of factors when choosing a pension scheme. Brand reputation and costs and charges were the biggest influences, each cited by 31 per cent, followed by ease of set up and ongoing management at 27 per cent.<\/p>\n
Investment options and payroll or HR integration were each cited by 23 per cent, while 22 per cent considered employee experience, including user-friendly apps and communications.<\/p>\n
Sorangi Shah, client director at Everywhen, said it was \u201cvery positive\u201d that employers were \u201cnot basing their pension decisions on costs alone\u201d.<\/p>\n
Helping employees assess pension value<\/p>\n
However, separate Aegon research found that just over half (55 per cent) of employees felt their annual statement actually helped them understand retirement savings.\u00a0<\/p>\n
This can create challenges for HR, which needs to ensure employees understand and engage with their pension, according to Sarah Moyo, people and communications director at Thalia Waste Management.<\/p>\n
Moyo warned that if employees \u201cdon\u2019t understand its value\u201d, employers\u2019 investment in contributions may not translate into \u201can effective employee benefit\u201d.<\/p>\n
To gauge employee engagement, she advised HR teams to examine \u201cparticipation levels, opt outs, contribution rates and employee feedback\u201d to assess whether their pension was \u201cgenuinely working as a benefit\u201d.<\/p>\n
Elliott recommended starting by asking providers for their \u201ccharges, fund performance and the support available to members\u201d, before benchmarking these against other schemes.<\/p>\n
But she stressed that reviews should go beyond costs and consider the wider support available to employees: \u201cDo they run financial wellbeing sessions or one to one guidance calls? Is there access to retirement planning tools or support for people approaching retirement who need to understand their options?\u201d\u00a0<\/p>\n
Elliott added that some providers included these services as standard but employers \u201cdon\u2019t ask, so they never get used\u201d.<\/p>\n
\u201cIf you\u2019re paying into a scheme, you should be getting the most out of it for your people, not just the minimum required to stay compliant,\u201d she said.<\/p>\n
For further guidance on workplace pensions, read the CIPD\u2019s factsheet<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Some employers are failing to check whether their workplace pension scheme still offers good value for employees, research…\n","protected":false},"author":2,"featured_media":894147,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":["post-894146","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-au","tag-australia","tag-business","tag-finance","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/894146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=894146"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/894146\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/894147"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=894146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=894146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=894146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}