Michael Klimes explores how the Pension Quality Mark's new communications guide can help the industry can improve engagement with members
The Pension Quality Mark (PQM) has high hopes for its Good Communications Guide, which it launched on 29 September.
The goal of the guide is to help scheme members make better decisions about their retirement planning, and give employers and schemes the tools and information they need to support members.
It is free and available to anyone who wants to improve communication and engagement. An introduction by Baroness Ros Altmann, three chapters and an appendix have been published so far. The remaining six chapters will be published on 18 October at the Pensions and Lifetime Savings Association's (PLSA) annual conference in Manchester.
Speaking at the launch of the guide on 29 September, Altmann argued the industry has to connect with savers at an emotional level to increase the appeal of pensions.
"There is a huge role to promote pensions as they are brilliant but people just don't know about them. There is a huge opportunity with the freedoms to do something positive," she said.
Royal London director of policy Sir Steve Webb, who helped create the guide in his capacity as a PQM non-executive director, tells PP why it is needed.
"Every scheme faces different challenges, but the research that PQM undertook prior to writing the guide revealed that many employers and schemes feel they lack the materials they need for effective communications. This is why the guide is accompanied by templates and tools that can be immediately used," he says.
Clearly PQM has a lot of ambitions for the guide, but what does the industry make of it and will it increase the appeal of pensions among the general public?
KGC Associates director Kim Gubler thinks the guide is a breath of fresh air.
"We thought the content is really informative and I think chapter three on segmentation and understanding your audience is particularly good. What we have usually done in the industry is target a message at an age cohort but this guide says you need to find hooks and get into peoples' lives to be effective," she says.
Although Gubler would recommend the guide to trustees, she sees some hurdles to implementing it in practice.
"The problem is that this is going to cost money, and who is going to pay? The guide talks about employers wanting to do the right thing for employees. This is great for the big employers as they tend to have resources.
"But the micro-employers that have not given pay rises to people due to pension contributions they have to make under auto-enrolment (AE) might not want to pay for a new communications campaign."
One solution could be that product providers rather than employers pick up the cost as the former have an interest in winning customers through AE.
"Their objective is to accrue assets under management. In order to do that they need to find ways to keep customers enrolled in the pension scheme," she continues.
Society of Pension Professionals (SPP) president Hugh Nolan thinks the guide is positive but warns it is not a panacea.
"The best thing is that it is a reference point. So trustees doing a communications exercise trustees can check they have not missed anything from best practice. But I don't think it will revolutionise the way we do communication and there isn't anything radical in the guide unfortunately."
Nolan has seen too many instances where communication strategies have fallen short.
"It is lovely to think pension schemes will win hearts and minds but we have tried time and again to communicate the importance of saving into a pension. No matter how many times we have tried it has not worked.
"This where default strategies, scheme design and compulsion to make people do the right thing come in as it is impossible to win the hearts and minds of everyone."
Arc Pensions Law partner Rosalind Connor says she can see the appeal of simpler communications, but is wary of what she calls the "Trump effect" on communications.
"Some concepts in pensions are complicated and there is a risk that too much simplification in scheme communications can lead to inaccurate messages being sent to members.
"Sometimes we have to tell members that 'you will be fine but you have to spend a couple of hours reading these documents in order to be so'."
Nonetheless Hargreaves Lansdown senior pensions analyst Nathan Long is supportive of PQM's efforts.
"This looks really good as it takes a marketing approach to influence behaviour versus a pensions industry approach. This has been characterised by jargon and a lot of very technical information.
"The two key things in DC that determine outcomes are contribution rates and investment returns. If you can influence one or both of those elements, it will improve retirement outcomes for members."
Winning hearts and minds is the key to better member outcomes and trustees should use PQM's guide as a point of reference to help them create a persuasive communications strategy. But it will take more than just the use of the guide to communicate a message that really gets through to members.
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