20-20 Trustees have significant experience in member engagement, DC scheme communications, DC governance and investment committees and are well placed to support a DC scheme through both its governance and engagement challenges.
As such, we understand that being a trustee for a DC trust-based pension scheme is all about improving member outcomes. Achieving this should start from, but certainly must go beyond, value for money on default funds and DC Chair Statements. Yes, these are critical governance issues that must be tackled, but we believe that truly enhancing member outcomes will come from education, engagement and guided choice.
In our experience, members engage with all types of savings, particularly pension savings, when two things are present in communications:
- The outcomes for members are presented in a transparent way with clear consequences about the decisions members need to make. Presenting personal illustrations and meaningful context are a really important part of the education and engagement process.
- The DC scheme is presented as a valuable service, not just a HR tool or an auto-enrolment compliance vehicle. People are engaged with products and services that they perceive as being valuable. This seems obvious, but ask any marketing professional – it is not always easy to convince a consumer that there is value in a product. Whether we like it or not, pensions is a product and a service that is being provided to consumers and if we want our members to engage, we have to be able to convince them of the value it offers.
The industry worries about apathy amongst savers because the outcomes are so far away, meaning members do not engage with earnest. This has meant that a lot of effort has been rightly placed on choosing suitable default funds which the vast majority of DC members will go into if they do not engage with their investment choices. Making choice easy (e.g. online and app-enabled selection), relevant (by illustrating potential outcomes) and immediate (perhaps through gamification) can all help increase engagement. We believe that work-based engagement, where members can interact with their choices easily, also has a dramatic effect on engagement and therefore improves outcomes.