Best Practice in Pensions Communication

Best Practice in Pensions Communication

The website of The Pensions Regulator (TPR) details the information that must be provided to defined benefit (DB) pension scheme members. This information must be provided to members, prospective members and husbands, wives or civil partners of members and prospective members amongst other people. The information that must be provided includes how the scheme is run, the benefits it provides and the fact that the annual report and accounts are available on request within seven months of the end of each scheme year.

With regard to the annual report there are a number of items it must contain including the following:
•    a copy of the audited accounts and auditor's statement
•    details of the trustees and how they are appointed and removed
•    details of the scheme's professional advisers and fund managers
•    an investment report, including how the investments have performed
•    the number and breakdown of scheme members
•    the number of other people entitled to benefits under the scheme

Additionally, there are a number of items that must be made available on request including:
•    the scheme's trust deed and rules relevant to the individual's membership
•    actuarial valuations
•    the scheme's schedule of contributions
•    the scheme's statement of investment principles
•    the trustees’ annual report and accounts

Also on the TPR’s website there is detailed guidance for communicating with defined contribution (DC) members but no corresponding guidance for DB members. This is presumably because there is a published TPR Code of Practice for DC schemes  but for some reason there is no similar Code of Practice for DB schemes. Whether TPR intends to produce a DB scheme Code of Practice is not currently known (a question about this has been submitted to TPR).

Nevertheless, it is assumed that there is no reason why the communications guidance for DC schemes shouldn’t also be applied to DB schemes. For example, the DC guidance suggests the following:
•    that the trustees should know their members and seek their views
•    that member surveys could be carried out
•    that workshops could be run
•    that a member AGM could be held
•    that focus groups or forums could be held to ascertain members’ views
•    that monitoring of website visits and emails read and opened could be carried out
•    that communications should be accurate, clear, relevant and in plain English
•    that the communication strategy should be regularly reviewed

For a deeper insight in to how communications with pension scheme members could be carried out it is instructive to look at how the Pension Protection Fund (PPF), a statutory public corporation communicates with its members. It is clear that the PPF believes that communicating with its scheme members is very important. This can easily be seen by the time and resources it puts into this aspect of its operations. Examples of the resources and information available to PPF scheme members are as follows:
•    an extremely comprehensive website with facilities for individual members to log in
•    a secure electronic mailbox so that members do not have to correspond with the PPF via unsecure e-mails
•    a yearly “Member Focus” publication with detail about asset growth, number of current members and useful articles on investments and scheme administration
•    a number of downloadable booklets providing frequently asked questions for new members and more detailed information for particular aspects of the pension scheme
•    a “Video Zone” providing videos on how the PPF is managed and funded and instructions on how to use certain PPF member resources
•    a regular member forum to feed back member suggestions and concerns regarding the PPF and how it is run.

Having attended a number of PPF member fora, I can definitely state that the management of the PPF take these very seriously. The Chief Executive and a number of board members normally attend and all suggestions from members for administrative changes are seriously considered assuming they are practicable and implementable. Further, members attending are asked questions about various aspects of the PPF’s operation with a view to continuously improving its performance.

There are a number of other documents available which give further detail on this topic as follows:
•    a document entitled “Golden Rules of Communication” from NEST which is a public corporation of the Department for Work and Pensions set up to run the government’s DC pension scheme.
•    some text and recommendations from the House of Commons, Work and Pensions Select Committee from back in 2013.
•    the Local Government Pension Scheme Regulations 2013 require local authority pension funds to maintain and publish a communications policy statement so there are various published documents available on line including this one administered by Cornwall Council; this one administered by Kent County Council; and this one administered by Surrey County Council.
Examples of the communication elements that these local government pension policies often include are a website, a telephone helpline, one-to-one appointments, presentations, roadshows, booklets and leaflets, guides and factsheets, benefit statements, newsletters and member surveys.