How are you communicating the auto enrolment increase to employees?
It’s great news that, since the introduction of auto enrolment back in 2012, 10 million people have been saving for their future through their workplace pension scheme. It shows that this initiative really got people thinking about the importance of putting money aside for retirement, which is brilliant.
As you are aware, minimum contributions into workplace pensions were planned to increase gradually; in April 2018 they rose for the first time to 2% from you and 3% from your employees. At that time this increase spiked fears of a potential rise in opt-out rates, which proved not to be the case, as revealed in this research published last year.
Now, the minimum contributions are due to increase again this April to a total minimum of 8% of an employee’s qualifying earnings, being 3% from you and 5% from your employees.
What’s in it for me?
It’s essential that you communicate this change to your workforce effectively, so they know what to expect and, mostly importantly, understand this increase is something positive – an easy way to save money with the aim to achieve the retirement they dream of.
Bear in mind that some employees might feel a little anxious as they wonder how this increase might affect them, so the message needs to encourage them to embrace the change and appreciate the advantages of it. Remind them that your contribution will increase too, which is something they will benefit from.
Once you are happy with the message, I strongly recommend that you put together a communication plan and take into consideration a multichannel approach, which might include group presentations, drop-in sessions, webinars, posters, desk drops, emails and online.
Does your organisation have an intranet or an employee benefits portal? If so, make sure the information is reflected on there too, so your employees can have access to it at any time. Ensure you use plain English to describe the changes and that the images you use are attractive and engaging.
As an employer you are in a great position to help your employees create healthy saving habits and truly understand the importance of investing in their own future.
By Ian Bird, Secondsight Partner and Founder of Mybenefitsatwork