Estimated reading time: 2 minutes
Defined contribution (DC) pension scheme trustees work hard to show members the efforts they undertake, so members can better understand how it benefits them. But now, they will have to go the extra mile.
For schemes now reporting, anyone will be able to see what trustees do and how it impacts their members, because this important information must now be made available via a website accessible to the general public.
Going the extra mile
Schemes do everything asked of them, but we believe they can use the data they gather to better effect for the advantage of the scheme.
Schemes must now analyse investments in order to make disclosures on costs and charges, and project the impact of charges on different groups of the membership.
These requirements are quite onerous, but you can turn them to your advantage. Instead of simply doing something for the sake of compliance, why not use that insight to improve the scheme and make it more relevant to members.
For instance, the data analysis you do on costs and charges, can be used to determine – and prove – value for money, which must be shown in the chair’s annual statement. It can also better inform investment choices, and shape how you communicate your strategies to members.
Help is at hand
Whether you use our analytical tool called GEM – Governance, Engagement, Monitoring – or do the number crunching yourself, you will have to be able to make the required disclosures.
GEM breaks the data into nine different cohorts of members of different age and affluence (looking at salary and DC pot sizes) providing answers to use for making your cost and charges disclosures.
It also enables you to understand where people are in their retirement planning journey, where they might get to and the help they might need to get there.
In turn, this gives you the opportunity to deliver appropriate tailored responses for each of those groups.
I want to tell you a story
A site has also been built to display the illustrations and chair’s statement. This is something you produce because the law says you must. But why not use it – or at least some of it – to add real value to your member engagement programme?
We know that few members will read the statement itself. But stripping out the highlights and combining them with clear infographics into a single page can show members that their scheme offers them great value for money and that it is of high quality. Telling the story more simply is a great way to increase membership engagement.
More opportunities for the scheme narrative
Governance requirements won’t stop there. Environmental, social and governance (ESG) factors are going to increase the requirements of DC scheme reporting over the coming years.
It may prove difficult to align the various trustee, sponsor and manager ESG beliefs, but it offers an excellent opportunity to enrich the investment data and make investment communications more meaningful by focusing on issues the members really care about.
We believe those trustees that embrace the new governance requirements and go beyond the basic compliance requirements will better serve their communication and engagement processes.