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Three Pension Engagement Trends For 2019

21 February 2019

This article first appeared in PMI Pensions Aspects Magazine – February 2019

1. Technology

This feels like an obvious, perhaps even glib answer. But  the truth is it is still a prevalent subject.

Pensions engagement has often lagged behind the ‘cutting edge’ of communications technology, but over the past few years, it’s been catching up and at last the gap seems to be closing.

Little more than a decade ago, people were still asking ‘why on earth would our members want to read about their pension fund on a website?’ Now there are few, if any large plans without some kind of web and/or digital platform to enage their members.

We’re all continually exposed to the unceasing whirlwind of technology development.  Not just in the context of data (who now isn’t surprised about receiving personalised comms that use our personal details and also reflect our prefereences and past choices) but also in the context of media and channels. 

Last year saw the development and depolyment of a number of innovative personalised animation benefit statements – short videos providing a dynamic and engaging overview of our pension pot. We also saw the rise of Augmented Reality applications, used to bring generic pension communciations to life.

Some organisations are already looking at how voice activated devices like Alexa and Siri might be used in this space.

The way pensions are communicated is radically different to the way it was 20 or even, 5 years ago. What we’ll be doing, and how we’ll be doing it in the future may include some familiar elements but is also sure to include media and channels in ways that we can’t currently imagine. 

2. Perspective/context

2018 saw the emergence of a number of new buzzwords, just one of which was “FinWell”. 

This isn’t a beginner snorkelling class but the concept of looking at financial wellbeing from a holistic and integrated perspective. So rather than seeing members purely as extensions of their membership of the pension plan, seeing them as more mutli-faceted financial consumers with a wide range of often overlapping financial dynamics and elements in play at any one time.

Many years ago, when auto-enrolment was first being rolled out, one large retailer took the initiative to ask staff how they felt about these strange new pension rules. The results clearly showed two things:

  • That the level of basic understanding around saving for retirement generally and the pension scheme more specifically, wasn’t just low – it was subterranean
  • That the appetite to understand pensions better wasn’t necessarily always at the same low level, but almost always prioritised behind understanding how to take a bit more out of their money. In other words, short-term financial needs usually took precedent. The younger the individual, the more pronounced this typically was.

Not exactly a surprise or unexpected but the organisation’s response to their finding certianly was.  

Rather than press ahead and build new engagement strategies on this distinctly dodgy ground, a basic, non-pensions-specifc financial education campaign was launched. Spearheaded by a well-known celebrity of the day, the campaign was designed to help their people understand more about the financial basics – indirecly also improving their abiity to understand and engage with the AE communications that followed. 

Treating people as more than just members helped led to, at-the-time, strikingly low levels of opt-outs.

That was some years ago now but 2019 should be the year that FinWell goes beyond the buzz.

3. Emotional intelligence 

Summed up by Antonio Damasio in his book ‘Descartes’ Error’, the role of emotion in decision making has long been positioned as less critical than that of logical or rational thought. But neuroscientst Damasio argues that how we feel about options and actions is at least as important.

Superficially at least, this appears to be supported by the observable, worldwide balance of marketing and advertising effort between fact-based, information-centric campaigns and those actively seeking to levergae feelings and emotional appeal.  

Precise estimates of the split between these two high-level approaches vary but as the global advertising and marketing spend in 2018 was $1.299 trillion*, that’s a lot of effort being expended trying to influence the way we feel. 

In our industry, the challenge we have is that most ‘normal’ people think pensions are complicated, boring and maybe even a bit scary. These thoughts can make those same people feel confused, apathetic and even anxious about how they interact with their pension.

It’s these feelings that are the real barriers to engaging with pensions. But the traditional, information based, rational appeal approach to communicating pensions hasn’t done much to break down thsoie barriers. Nor will it.

The phrase ‘If you do what you’ve always done, you’ll get what you’ve always got’ has been variously attributed to Albert Einstein, Henry Ford, and Mark Twain but it feels like the sentiment is appropriate in this context right now. A sea-change is needed – a move away from ‘information only’ to ‘inspiration also’. 

Last month, Professional Pensions launched its #PensionsPositive campaign to general acclaim as a way of trying to change the traditional doom-laden coverage of pensions issues. If such an august journal is trying to make the industry feel differently and more upbeat about itself, how good would it be to help people feel the same about saving for retirement.

4. We are all us

The focus of this article has really been on member engagement. Partly because whenever the word enagagment is mentioned, that’s the usual association.

And the recurring theme has been that ‘members are real people too’ and by seeing them as such, engagement strategies and options can be developed in a different and more constructive way.

But that thought also goes further. Because trustees and company pensions staff are also real people.

Effective engagement strategies are typically restricted to ‘just’ member engagement issues – the trustee and the company can often get lost somewhere. 

Taking such a focussed (or blinkered) approach can mean these two critically important stakeholder groups don’t feel as engaged as they could be, which in turn has a detrimental effect on how they approach member engagement.

The same key trends highlighted in this article as important for members – technology, perspective and emotion – are no less important for the way trustees and the company engage with their plan.

For example, web-based software and mobile apps can ease the administrative burden on trustees, freeing up precious time to focus on adding value in their role. And adopting a more holistic, FinWell view of members can lead to benefits for the company from increased employee engagement and reduced financial-stress-related absence.

Perhaps the critical piece is round emotion. If we do want members to feel differently about saving for their retirement and inspire then to adopt new behaviours, how much easier will that be if we within the industry are similarly engaged?

After all, we’re all real people.

*According to data and analysis firm PQ Media

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