UK - Schemes must radically overhaul their communication processes if the voluntary approach to pensions is to survive, Hewitt Bacon & Woodrow claims.
Consultant Tony Bailey says automatic scheme enrolment alone will be insufficient to adequately boost savings levels.
He says employers must take account of the biases and influences that affect their workers’ decision-making processes as people are not “rational calculating machines”.
One way to boost pension savings is if employers can convince workers to commit to increasing their contributions at a later date.
Members often think solely in terms of take-home pay Bailey explained, so if the increases coincide with pay rises, they will believe that the increase has come at little or no extra cost.
And to ensure that automatic enrolment boosts scheme membership and savings levels, Bailey said members must be presented with a limited range of simple options to choose from when they join their scheme.
He said that if members are faced with a complex situation, they will defer making a decision.
This week's top stories included Cardano announcing plans to acquire Now Pensions from a Dutch pension fund later this year.
Royal Bank of Scotland (RBS) faces a £102m impact on liabilities as a result of equalising guaranteed minimum pensions (GMPs), according to its annual results.
Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point