Re-imagining and reassuring employees of their pensions
Katherine Easter, July 30, 2020
As employers focus on how the world of work will look following the COVID-19 lockdown, the immediate challenge facing HR teams will be to reassure employees that the work environment is safe, and re-imagine the workplace
New and different ways of working have evolved for many since March, offering greater flexibility and harnessing technology to offer new possibilities.
Beyond the practical questions about how we work in the future, broader questions about physical, emotional and financial wellbeing will also be front of mind for employees. As employers, we have an essential role to play in helping our colleagues find answers to these questions and adjust to the post-pandemic world.
Every industry and every employer will be experiencing unparalleled change and for some, their very survival will necessitate tough decisions.
As our focus naturally shifts from the short-term to the long-term, one of the many questions employees may ask from a financial perspective is: how safe is my retirement pot?
This question will become even more immediate as the economic impact of COVID-19 begins to unfold and the UK begins to enter the anticipated recession, placing further strain on stressed employers.
The Pension Protection Fund (PPF) protects the futures of defined benefit (DB) pension scheme members by providing them with compensation if their employer fails and their scheme is unable to pay them their promised pension.
Since the start of the pandemic, we have seen an increased number of member calls on a wide variety of issues related to their pension savings, demonstrating the very real concerns that many have.
A number of key industry partners have had similar experiences which highlight employee worries about the security of pensions, the availability of good advice on retirement savings and the risk of pension scams.
This uncertainty coupled with the perceived complexity surrounding pensions is fuelling worry and panic at times like these. Recent research from YouGov shows a third of people who don’t have complete trust in pensions attribute this to stories they’ve read about people losing everything when their employer went out of business, and a quarter attribute it to concerns about pension scams.
Workplace education in pensions is the best way of fuelling greater trust in this important employee benefit and giving people better confidence in their financial future.
That’s why, with support from pensions minister Guy Opperman, we have worked with six of our industry partners to create a comprehensive guide for pensions savers - ‘COVID-19 – Where to get help.’
Our partners included the Financial Services Compensation Scheme (FSCS), Money and Pensions Service (MaPS), The Pensions Regulator (TPR), the Financial Conduct Authority (FCA) and the Pensions Ombudsman.
There are some fundamental questions that every saver would benefit from knowing the answers to. Questions such as: is my pension protected? How do I protect myself from pension scams? Is it safe to move my pension?
HR teams should play a role in providing a broad understanding of pensions and, in turn, reassurance to their employees, who can then go on to make informed decisions about their retirement savings.
While it can be difficult as a HR professional to navigate the complexity of pensions they are a benefit that are valued and valuable, and the information is readily available to promote a better understanding.
But this isn’t about an extraordinary response to an extraordinary series of events, or a reaction to the uncertain economic outlook. Wellbeing – whether physical, emotional or financial - is key to having a motivated workforce and the dialogue should be continuous and ongoing – through the good times and the bad.
So, as some of us return to the office, we shouldn’t only be thinking about new ways of working as a practical question. As HR professionals, we are key to building a culture that encourages openness and transparency about the issues that truly matter to our employees – working together to address these challenges can achieve so much more, and I hope that becomes the legacy of lockdown.
Katherine Easter is chief people officer at Pension Protection Fund