Company pensions v workplace pensions        

 

I went to a networking lunch the other day, where each of us around the table posed a question related to our business. My Question was "What do you think about workplace pensions". The responses were interesting. Some thought that automatic enrolment is a dog's breakfast whilst others spoke of moral obligation and retaining staff. But the most striking feedback, because nearly everyone agreed with it, was that "Company Pensions are good but workplace pensions are bad"

 

That struck me as odd because they're basically two labels for the same thing. Now, these were not stupid people, so how do people form such different perceptions?

 

The term company pensions for many still relates to the golden days of gold plated final salary pension schemes but that takes rosy specs to see. The reality is that most large and SME businesses switched to Defined Contribution many years ago and they are still valuable company pension schemes. No, I don't think the answer lies there.

 

In the first Pensions Commission report, the report of the investigation that gave birth to automatic enrolment, there was a key reference to "The decreasing belief among many employers that there are self-interested reasons to provide good pensions to achieve recruitment and retention objectives". That, I suspect is at the heart of the issue. Workplace pensions is a new label, dreamt up in a policy review meeting somewhere, to make it all fresh and consign stakeholders pensions to the bin. The trouble is that it seems to be dumping all the positive association with company pensions to the bin as well. So, whose fault is that?

 

Some possible suspects:

 

  • The government: for making it project fear. No doubt they did their customer focus surveys and found that many employers, especially small ones, just see pensions as a burden. So, If they're not going to take an interest in pensions, we'll just hammer the compliance message until they get it done. Changing perceptions takes thought leadership and this is noticeable by it's absence. Maybe though, it's not really their job?
  • Pension providers: for failing to rise to the challenge of putting employers at the heart of the project and for competing  with the government for the the title of pensions hero. How many communications that you see, point to employers doing anything but what they're told?
  • The pensions advisory sector: for disregarding small employers for financial reasons. A long term view could be that small companies could become big employers one day and a general uplift in understanding of pensions issues would deliver better engagement right across UK ltd, for everyones benefit. The short term view is winning. And for those that do engage, project fear has won here too.

My vote for arch villain,goes to the pensions advisory sector for abstaining or adopting project fear, instead of delivering the vision and leadership that the project deserves.

 

I confess that I'm getting old and therefore becoming susceptible to rosy specs and ideology, but to me, if we don't get together to start promoting workplace pensions as company pensions, the pensions commission's concern will never be dealt with. Workplace pensions will stay "bad" and contribution levels will only grow through compulsion.

 

Perhaps we should send Bananarama to the next meeting of the Friends of Automatic enrolment. "It ain't what what you do, it's the way you do it, and that's what get's results"......

 

 

 

 

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