UK - Pension schemes can be a vital tool in recruiting and retaining staff - provided their value is explained to members.
Diageo group pensions and benefits director Steve Mingle said few employees understood the value of their scheme compared to private pensions and companies needed to explain this better.
Diageo, he said, had started to show members just how much it would cost to obtain similar pension benefits privately.
In most cases the cost to the workers would be around five times as much.
Mingle said that communicating such advantages more clearly would help pension schemes to be seen as important to recruitment and retention strategies.
It was also argued that companies would also benefit from such communication as they could trade off pay rises and other benefits against the pension.
Buck Consultants head of technical services Kevin LeGrand said: “If people knew more about their pension benefits, it might lead to fewer calls for increased pay.”
He added: “A competitor employer with a defined benefit scheme may have a superior recruitment and retention tool over its rivals which offer a DC scheme, particularly if the DC scheme has relatively low contribution rates.”
This week's edition of Professional Pensions is out now.
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