Schemes need to customise communications to members more to avoid sending out the wrong messages, according to HSBC pension scheme chief investment officer Mark Thompson.
Speaking at the National Association of Pension Funds conference, Thompson said communications should be targeted at particular types of members.
"We need to be more subtle and more segmented about what we say to people and when we say it, and also what means we use to communicate," he said
While it is important to increase people's awareness, he said it all comes down to "sending the right messages to the right people at the right time of their lives".
Thompson is concerned many members are receiving the wrong kind of messages at the wrong point of their lives.
For example, young members may be encouraged to increase their contributions but are actually unlikely to be able to afford to it.
The bank's defined contribution (DC) contributions are particularly generous as the sponsor puts in 10% and then matches employee contributions up to another 7%.
Thompson said that generation Y members probably could not afford 7% contributions given they had probably just started working and were sitting on student debt.
This means the scheme needs to "think about what's the right messaging to get to them" and that "more segmentation in communication is the answer", he added.
Over the last two months the scheme has been looking at the last 2,500 new entrants to the HSBC scheme through work with its communications consultant.
Two thirds are from generation Y, and 50% earn less than £25,000, while a third live in London and therefore pay high rents. These people probably could not afford to contribute 7% at this stage of their lives, he said.
Thompson also pointed out the belief that members who fall into the default scheme are not engaged at all with their pensions is not entirely true.
From his experience in talking to some of HSBC's members, some actually want to be in the default strategy because they believe it is good quality.
He therefore urged schemes to think very carefully about the investing strategy they use for the default fund.
More than half of BlackRock’s flagship UK defined contribution (DC) default fund’s assets will be invested in ESG strategies by June 2021.
Graeme Bold says the right communications can improve both the level of savings and the outcomes for savers.
More than half of UK savers agree they are unable to save sufficiently to achieve the retirement they want, according to research by BlackRock.
Pension savers have held off from making changes to their pensions despite nearly half having been impacted by the pandemic, research finds.