Britain’s pensions’ crisis is being made worse by employers failing to tell their staff how good their schemes are.
A study by the Chartered Institute of Personnel and Development and the Employer Task Force on Pensions has warned that employees often do not fully appreciate the benefit of their occupational pension scheme, meaning take-up is not what it should be.
Just as worrying, few employers kept staff informed about their pension arrangements on an on-going basis, its report, Pensions and Retirement: Attitudes and Expectations, found.
Almost one in five of over-50s interviewed said they had little or no understanding of how their pension scheme worked. This rose to one in three of under-25s questioned.
If employers wanted to encourage take-up, they needed to be doing more to tell workers about their schemes, how they worked and the benefit they could get from them, the CIPD recommended.
To this end, the CIPD has joined forces with the task force to publish a new pension guide that uses case studies to show small, medium and large organisations how to communicate their pension schemes more effectively.
CIPD adviser Charles Cotton said: “Pensions can cost employers a lot of money - but they can also be a huge investment for the business. As people become more worried about the future of retirement, the pension offered by an employer could become more of a deciding factor for potential employees. But far too many employers with excellent pension arrangements are hiding their lights under a bushel.”
Employers needed to think about how they planned to go about communicating their pension scheme to staff, and make sure they invested enough time and money in doing so.
Email, posters and staff presentations were all good ideas in ensuring employees understood a pension was on offer and what it meant for them.
Sir Peter Davis, chairman of the Employer Task Force on Pensions, said: “Many people just don't understand the value of employer pension provision and the lack of awareness has had a direct effect on demand.”
He added: “If employees don’t value pensions, employers are less likely to provide them.”
