Psst! Need to talk about pensions? Here’s how to get employees to listen.
Companies try different mediums and methods to communicate pension information, yet they often see meagre results. Here are six tips to make sure your communications hit the mark.
1) Put employees first – Stop talking about your concerns (pensions) and instead talk about their concerns (daily finances, debt, children’s education, aging parents, etc.). By getting your employees’ attention on the topics most pressing to them, you can show them how these concerns affect their ability to save for retirement, as well as the benefits of the company pension plan.
2) Offer comprehensive education – Personal and household finances are a major source of stress for Canadians. By offering your employees more comprehensive financial education, you will increase organizational commitment because you will show them that the company cares about their well-being. This will reduce their financial stress, help them to understand how their pension fits within their overall finances and, ultimately, increase their overall participation in the plan.
3) Make it worth their while – Let’s face it: with fewer than 15% of capital accumulation plan members showing up for retirement and pension sessions (according to Benefits Canada’s 2012 CAP Member Survey), hosting another one may not be the best use of anyone’s time. Instead, host a general session on personal finance to get their attention—maybe a short session that offers 10 ways they can save and do more with their money. In that session, you can show how people can pay off debt faster with the same amount of money and save more for retirement through payroll deductions. Employees will come because they want to learn how to make their money go further—and you get to talk about retirement and pensions.
4) Let someone else do the talking – Many of your employees may feel they’ve already heard what you have to say, and no matter what you say, they won’t pay attention. So bring in an independent, unbiased third party that doesn’t sell products in order to help re-engage those employees who have given up. This can increase participants’ confidence in the message about the viability and value of the company pension plan and also help reduce the company’s exposure to liability.
5) Tell stories – Studies have shown that a surprising number of Canadians have low numeracy and document literacy skills, meaning that they can deal only with simple, clear material involving uncomplicated tasks, and they struggle to understand and use information in forms, charts, graphs and other tables. So rather than focusing on numbers and charts, tell real-life stories. Retired employees are a great source for first-hand accounts of participating in the pension plan and transitioning to retirement. Share their experience through stories by recording audio interviews and podcasting them, or by recording video interviews and sharing them through an e-newsletter.
6) Explain total compensation – Employees rarely understand how much their company spends on their total compensation. Companies need to show the entire compensation amount, explain what portion of that is a pension contribution and then help employees to enrol in the pension plan. For example, if the employee’s salary is $50,000 and you offer a 6% pension match, explain that the person’s total compensation is actually $53,000 (or more, if you include the value of all other benefits) and then provide the breakdown. If employees see their pension plan as part of their total compensation, they’re more likely to participate in it.
With a little ingenuity and time, employers can help to get employees engaged and even excited about their pension plan—and saving for retirement.
Frank Wiginton is CEO of Employee Financial Well-being and author of How to Eat an Elephant: Achieving Financial Success One Bite at a Time.
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