But it is surprising that a staggering proportion of the UK working population do not take up this benefit. It is old news that the UK is facing a pension crisis but in light of the current economic climate, it is worrying this has still not prompted the majority of us to start creating a financial cushion. Nearly half (47%) of those employed in the UK do not have plans in place for when they retire - despite 82% believing the state pension will not support them.
This extent of the problem may partly be due to a lack of concern about the future among the younger generations. While it is understandable that retirement seems a long way off when you're 21, it is astonishing that nearly half (46%) of 35-44 year-olds say they intend to start planning for retirement ‘later in life'.
However, it oversimplifies the issue to blame bad financial preparation on a happy-go-lucky' attitude. Our research suggests that while some degree of financial concern is recognised by most, a large majority of the population find the issue of financial planning confusing and nearly half (46%) feel that the information needed to plan for retirement is not readily available to them - a number that only slightly decreases to 42% for those currently in employment. In fact, 63% of the working population say they would like their employer to provide them with more information about financial planning.
In a separate survey we asked people why they are not joining an occupational pension scheme: 39% said their employer does not offer one and 14% had their own private arrangements in place.
A substantial 7% say they do not understand pensions; 7% do not trust pensions, and a further 10% say they cannot afford to make any contributions to an occupational pension. As occupational pension schemes are designed to enable everyone in employment - regardless of their income - to make provisions for their future life after work, the message is clearly not getting through to some.
Most companies that offer an occupational pension scheme promote this throughout the organisation but employers should check two crucial points in their communication regarding pensions with employees: Are they providing enough clarity around the pension schemes they offer? And are employees being actively supported in making the right decision about their pension arrangements, or is this process left entirely up to them?
In order to get to the bottom of these questions, an employee survey can be a good starting point to establish the reasons for low benefits uptake, clarify how staff view the HR team and their services and identify potential areas of improvement. While the best solutions for each business will depend on the exact issues at heart, here are a few tactics that have helped some business to keep awareness of pensions high among employees:
Appoint pension representatives for each business unit
These members of the HR team are the first point of call for any questions to do with pensions and financial planning for retirement. Having a dedicated person as the ‘face of pensions' makes the HR team more approachable and demonstrates willingness to co-operate and provide guidance.
Benefit fairs
Held several times during the year, such fairs keep benefits top of mind. Employees can come along and ask all the questions they've always wanted an answer to and arrange individual advice sessions with members of the HR team (or external advisers where applicable, referred by HR).
Guest speakers and Q&A sessions
Inviting guest speakers (the FSA, financial advisers, reps from the pension provider) again gives employees a chance to raise questions and to familiarise themselves with the complexities of financial planning for retirement, which can be a daunting issue particularly for younger staff who may not have thought much about it yet.
Dedicated space on internal intranet, plus publicity
If you've got it - flaunt it. Having a dedicated space for pensions (and benefits in general) on the intranet is a good way to keep information handy for staff. Advertise benefits around the office and point people to the intranet site in as many ways as possible (competitions, emails, posters, flyers, rewards for booking advice sessions, etc.) and at regular intervals. Get creative.
Employees don't just need more information, they need it through better delivery channels and backed up by advice that helps them to make the right decisions for their retirement. Implemented well, this will go a long way towards a brighter future for the pension schemes, the employees - and the HR team.
Gemma McIntosh is head of stakeholder management at TNS