A new guide has been launched by the Pension Quality Mark (PQM) to help companies communicate more effectively with their staff about pensions.
The PQM guide to good communication is the first guidance note published by PQM, the industry’s mark of excellence for defined contribution (DC) pensions. It aims to tackle the issue of poor pension scheme communications, which can prevent people from saving in a pension.
The guide, which features several case studies, offers employers and pension schemes guidance on the process of communicating with savers. It highlights why communication is important, the principles of effective communication, and how to communicate and when to communicate.
Alexandra Kitching, PQM Manager, said:
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“Companies providing pensions to their staff must ensure that they are communicating with them effectively about their retirement plans. If they fail to do so, there is a risk that employees will make poor decisions that will affect their income in retirement. Employers also spend a lot of time and money on pensions, so it is important that they properly communicate this great employee benefit to their staff.
“While there are excellent examples proving that employers and trustees are engaging in good communications, the reality is that there is a still a lot to do when it comes to communicating pensions to staff.
“PQM has published this practical guide to help employers and trustees grasp this important aspect of their work. Better communication is crucial if we are to get people more engaged with pensions saving.”
The guide is available free of charge. It is sponsored by communications agency Ferrier Pearce and asset manager and global investor Legal & General Investment Management. It can be downloaded from http://www.pensionqualitymark.org.uk/publications.php.
PQM was set up by the National Association of Pension Funds (NAPF) in September 2009 to recognise good quality defined contribution (DC) pension schemes that have high standards of governance, contributions and communications.
The mark has been given to 172 pension schemes, and covers around a third of a million active scheme members.
There are two standards, PQM and PQM PLUS.
Under PQM, the scheme’s total contributions must equal at least 10% of an employee’s pensionable salary, with a minimum employer contribution of 6%. Under PQM PLUS, the scheme’s total contributions must equal at least 15%, with a minimum employer contribution of 10%.
