Can pensions still be a differentiator?

Companies hoping to attract the best candidates used to offer pension schemes as a way of standing out from the crowd. Not any more. Auto enrolment legislation has made workplace pensions mandatory, levelling the playing field. So how can you still use your pension scheme to distinguish your benefit offering?

In an ideal world (and with a correspondingly large budget), you could guarantee to match any additional contributions your employees make. Not only would you stand out as a generous employer, you’d be acting responsibly and fostering a culture of ‘save more, get more’.

Redefine pensionable pay

This is unlikely to be feasible though for many businesses, especially smaller ones. What you could do, however, is review how you define pensionable pay (it doesn’t have to be just basic pay) and consider making it more generous. Can you afford to include overtime or bonuses? Or perhaps allow employees to exchange some or all of a bonus into a higher pension contribution?

Yes, this could represent an additional cost, but it would also encourage better performance and be a really visible signal that you reward talent and effort. So your investment is likely to pay off.

Education, education, education

The other way to engage employees with this very important benefit is by educating them. Pensions may be a turn-off to some, especially younger employees. But start answering some key questions and you begin to build knowledge and commitment.

Questions we hear all the time include:

‘What happens if I leave the company – will I lose my pension too?’

‘If I die, who gets my pension – do I lose it?’

Offering answers to these pressing financial queries will really add value to your pension provision. According to the Chartered Institute of Personnel and Development (CIPD), 55% of workers say that being able to save for the future is one of the most important aspects of financial wellbeing, yet 58% face obstacles in managing their money – and financial jargon is one of them.

Unlike many pensions advisers, we believe knowledge is only power if it’s shared with those who need it. We’re more than happy to pass on what we know in layman’s terms. If people take responsibility for their financial future, their sense of security and wellbeing will improve.

You don’t need to lock your employees in a room for eight hours with a scary pensions adviser either. Our aim is to make pensions real and relevant to every employee. Workshops can just take up a lunch hour, and include coffee and a tempting sandwich too.

If you’re auto enrolling for the first time or looking to enhance your current offering, please contact us and speak to our pensions experts.