Designing Pension Communications for Modern Retirement Planning

Designing Pension Communications for Modern Retirement Planning
September 25, 2023 20 mins

Designing Pension Communications for Modern Retirement Planning

Designing Pension Communications for Modern Retirement Planning

Organizations can refresh their employee pension communications with these five tips to help people connect with their retirement planning.

Key Takeaways
  1. Pension communications need to change to reflect current workforce trends and employee priorities.
  2. Employers can use a wide range of techniques and channels to ensure a holistic approach to retirement planning that resonates with different employee groups.
  3. Organizations should leverage content creation specialists and communication experts to help devise and deliver effective campaigns.

We are now in the age of the 60-year career, where employees have flexibility around when and how they retire. Instead of the traditional model of overnight retirement, workers might choose to blend pension income with part-time earnings, take their long-time career in a completely new direction or return to work after a break before fully retiring.

Social and economic factors are also creating new pressures. According to Aon research, one in three U.K. employees expect they will have to work to the age of 70 or beyond. Conversely in Germany, employees aspire to retire well before the retirement age of 67, with only 4 percent of women and 6 percent of men expressing an interest to continue working until their retirement age, with a mere 3 percent working beyond it1. Despite the strong sentiment for early retirement, the stark reality is that many European citizens have not accumulated sufficient financial provisions to make this a realistic goal. In 2023, we see an annual shortfall of EUR 2 trillion, and if we continue on this trajectory, it is estimated that by 2060, 20 percent of EU citizens will be below the poverty line or facing social exclusion2.

With changing pensions, employees must now also make complex, life-changing decisions around converting saved money in defined contribution pensions into an income that will last up to 30 years.

To make matters worse, pension communication has fallen behind the times. Businesses therefore need to focus on communications that help people feel in control of their pensions and offer wider wealth and retirement choices. Employee awareness is the critical first step.

Helping Employees Engage with Their Pension

The concept of aging impacts individuals in different ways. In some cases, a mathematical principle known as hyperbolic discounting suggests that individuals can undervalue pensions because they are not immediately accessible in the present — and human attention is often focused on the here and now. In fact, most employees only to start to think about retirement planning when they get close to their normal minimum retirement age (i.e., the earliest age at which they can start to access their pensions).

Pensions are one of the biggest and most valuable assets that an individual will have, so boosting awareness and engagement early on is critical. Typically, individuals are more engaged with other forms of wealth. Homeowners, for example, will likely know the current value of their property and the size of their mortgage. And most individuals know the financial standing of their savings and bank accounts. By contrast, very few employees know how much is saved in a pension fund, or what this means in terms of retirement living standards.

With legislative reform – such as recent developments in the Netherlands and the U.S. – supporting transitions to sustainable retirement planning for both employers and employees, it’s time for companies to focus on improving education around pensions. Reframing retirement as a new chapter in life, whether that means being free from the stresses of employment or enabling individuals later in their careers to work differently, can be a gateway to engaging and educating employees.

This starts with designing successful pension communications to help employees take confident steps toward their future, value their pensions and understand how to make the most of them.

Quote icon

Employers have a golden opportunity to rethink workplace savings communications to reflect people’s real-life experiences, concerns and needs, address serious information gaps and make a practical difference to employees’ decision-making.”

Emma Johnston
Client Communication Director, EMEA

Five Ways to Improve Pension Communications

1. Use images and language that resonate and are culturally appropriate.

Low earners, young or ethnically diverse workforces are unlikely to relate to communications that only show pensioners with white hair. Additionally, employees that do not speak English as a first language or who struggle with financial concepts, may find long sentences and pensions jargon overwhelming.

Review all your pensions communications and ask if the words and images genuinely reflect your workforce. If they don’t, it’s time for a refresh.

2. Blend different communication approaches.

From traditional communication through in-person meetings, webinars and emails, to newer platforms like social media and WhatsApp, technology enables employers to engage with their people in new ways. Employees are used to absorbing information in a variety of formats, and different groups within the workplace will respond to messages in different ways. Many multinational organizations are standardizing their internal communication materials which are then tailored for local markets to ensure that the messaging resonates with the relevant culture.

Getting the balance right demands a strong understanding of the global workforce and intelligent use of data to create new communication campaigns. Doing so will encourage employees to rethink retirement and start proactively engaging with their pensions.

3. Be imaginative.

Having more communication methods can result in an overwhelming volume of information, especially from social media. Cutting through the noise is challenging when the subject matter is hampered by hyperbolic discounts and other sociocultural pressures.

To stand out and leave an impact, organizations must think outside of the box. For example, maybe there are related creative campaigns already running on themes like sustainability that could extend to support pensions. This could be the chance to motivate employees to think about their long-term plans through a different lens.

4. Make it easy.

Saving for a pension at work is one of the easiest financial decisions any employee will ever make. However, keeping track of the value of pension savings over an entire career and preparing properly for retirement decisions can be challenging. It requires effort, knowledge and engagement.

Pension leaders who successfully catch employees’ attention with inspiring, imaginative, yet straightforward communications, will help employees understand the importance of pension planning and encourage them to take action. The key is to make it as easy as possible. Provide quick access to pensions websites and information, support employees who are signing into their pension account for the first time, and ensure all steps and additional information are clearly stated.

5. Consider timing.

As employees continue to navigate the cost-of-living crisis, it is a difficult time to run a campaign encouraging people to save more in pensions. Inflation has made day-to-day living more expensive and put employees’ finances under pressure. Pension savings messages should therefore include a level of sensitivity and careful timing but should not be dismissed. It’s important to keep retirement saving in people’s minds for the long term.

Framing pensions as part of wider financial wellbeing communications can reduce the pressure felt by employees. This could include, for example, helping people to save money on their weekly shop, to make it easier to continue with pension payments.

Throughout the retirement planning process, engaging with benefit experts and creative teams can help employers develop effective messaging and campaigns.

Contact our team to help your employees build a strong financial future.

1 “Längere Lebensarbeitszeit – nein danke Betriebliche Altersversorgung – ja bitte (Working Longer – No Thanks, Company Pension - Yes Please)”
2 Exciting Development in European Pension News

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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