I read with a sigh, but not much surprise, that many employers are failing to engage with the retirement process of their employees. The headline from the Close Brothers survey, as reported in Professional Pensions, was that three in ten employers do not know where employees were getting information on the April 2016 pension reforms.
There also seems to be some indication that the fanfare and blast of publicity behind the launch of Pension Wise needs to be followed up, with a third of employers confirming they did not have a clear understanding of how the new service could help retirees.
The story underneath the headline was certainly not all bad. Over a third of employers said the recent reforms had encouraged them to play a greater role in financially educating their employees. If this positivity turns into real action, then there is a good chance that this attitude will become the norm.
If awareness of pensions and retirement doesn’t rise now, I guess it never will. Maybe the above results are actually an improvement compared with greater apathy in the past? Time will tell, but the one thing employers (and pension scheme trustees) can do is their best to ensure that retiring members gets access to the best possible information and advice as they approach retirement.
I think employers need to go further though, supporting the provision of one-to-one financial advice rather than relying on an “information only” service. The relative cost of advice compared with the total salary paid to an employee over their time with a firm is pretty negligible (even for employees with a few years’ service). I would encourage employers to consider this as a price worth paying (or at least contributing to), but like this survey find a degree of reticence to get involved. I do hope this changes sooner rather than later.