27 November 2012 - Post by:Helen Powell
Back in May I posted some cynical comments on this blog about NEST’s Golden Rules for talking to workers about pensions (and, in particular, about the frankly bizarre comparison drawn between those rules and a group of ageing rockers – see ‘Nest, Pensions and the Traveling Wilburys‘). Apologies everyone: it seems that those rules will be with us for some time to come.
The Government’s new ideas for ‘Reinvigorating workplace pensions‘, published last week, include six key principles for providing pension information, which bear an uncanny resemblance to NEST’s Golden Rules (though they do at least avoid the invitation to ‘keep it real’): The principles are:
1. Give people control – they must know they have a choice.
2. Focus on the benefits to individuals, not on their responsibilities.
3. Make it relevant now – engage with people as they are in their working lives.
4. Give real examples to help people understand the context.
5. Keep the presentation simple and let the facts speak for themselves.
6. Build understanding of basic concepts but tailor the level of information to the individual.
All of that makes good sense, but of course it’s difficult to do those things while at the same time complying with a complex and prescriptive disclosure regime (especially the information requirements which relate to auto-enrolment itself). When there is a great deal of rather dry information to be provided, it’s challenging for anyone to communicate in a really engaging way. Some help is available from the Regulator – there are significant resources available on its website designed to encourage better communications. More help may now be on the way from the Government with the news that, after several years of discussing the need to consolidate and simplify the overall disclosure regime, the wheels are finally turning and a consultation exercise will take place in early 2013.
The Government also offers some other ideas on improving engagement with pension saving. My personal favourite is this: it intends to study whether ‘appropriate interventions from various sources’ will nudge people into thinking about pensions: ‘This work would consider options for targeting messages at particular life events, such as the thirtieth birthday’.
If that becomes a reality, then in future you will still have to get to 100 to receive congratulations from the Queen – but the instant you leave your 20s the Government will remind you that you’re getting on a bit now and should really start ramping up the pension contributions. “Happy Birthday! Now start saving.” Someone in the DWP has a keen sense of how to get a party started.
Helen Powell is a senior professional support lawyer at Allen & Overy LLP.