Pensions Conference 2011. Review of Workshop A3: Communicating with members in defined contribution world

Better member communications essential if auto-enrolment/NEST is to succeed

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The importance of good member communications can hardly be over-stated as we move ever forward in a DC world – the success or otherwise of auto-enrolment/NEST may depend upon it.

As an industry although there has been some improvement in recent years, we still seem to find great difficulty in communicating pensions in a clear and cogent way without the use of jargon or other unintelligible language.

This is not only off-putting for members it is frequently the underlying cause of disputes which can be time consuming and difficult to resolve.

A much simpler system, which NEST purports to be, would undoubtedly help as would better standards of administration which provides good customer service and avoids delays and errors in all but a minority of cases.

Recovery of large overpayments is a potential source of difficulty which can affect the image and reputation of the scheme and bring it into disrepute and where good communication can play a vital role in securing an acceptable settlement. 

The audience re-action to the session appeared generally supportive with no dissent from the notion that communication with DC members had to be of a consistently high standard going forward with particular regard to the very significant changes that next year (2012) would start to bring. The interactive part of the session discussing dispute case examples seemed to be particularly well received although there was far from unanimous agreement as to what the eventual outcomes should be.

What next? Interestingly enough the DWP has now brought out a plain language guide denouncing the use of jargon and unintelligible words and phrases in pensions communications and appealing to the industry to support them to secure improvements in this respect. The guide is described as work in progress and builds on the phrase book already produced by NEST itself and is clearly designed to facilitate the introduction of auto-enrolment and the engagement with pensions for the first time of millions (they hope) of  new members. This has already attracted the attention of the BBC who recently invited me to make a short video for their website which can be viewed at http://www.bbc.co.uk/news/business-14210810 .