Member communication and engagement - benefit accrual switch
The Engineering Construction Industry Training Board (ECITB) appointed Barnett Waddingham in March 2015 to provide member communication consultancy to their scheme members. This related to the proposed switch of future benefit accrual from the defined benefit (DB) section to the defined contribution (DC) section of their scheme.
Having provided actuarial consultancy services and working collaboratively with the trustees on a day-to-day basis since July 2011, the provision of communication to members regarding the proposed changes was a natural progression.
ECITB was keen to ensure that their members understood the nature of this proposed change, including:
- the different ways in which both benefits work
- what would happen to their existing DB benefits
- how their new DC benefits might accrue
- the impact of upcoming changes to their State Pension entitlement
In order to effectively meet the needs of ECITB, the trustees and the scheme members, we established a dedicated team of consultants including our DC, engagement and IT specialists. The team worked with the company to facilitate streamlining the project and to ensure consistency of messaging throughout a number of group presentations and one to one meetings with scheme members. Members were informed of these sessions in advance, which provided the added benefit of enabling them to use the sessions as a forum to raise their questions and concerns.
ECITB also highlighted their concerns with how these changes might affect their members in respect of their individual circumstances. We were able to provide a bespoke solution in our powerful member-engagement portal Me2 which delivers access to information and tools which help members map their own savings future. With all of their benefits (DB, DC, existing pensions from previous employment and State Pension) in one place members can see what these might look like in the future and how contribution and retirement date solutions could affect their ultimate benefits.
Me2 also provides the functionality to see the impact of the new retirement flexibilities set across these different types of member specific benefits. For example, someone looking to retire ahead of normal retirement age could compare drawing DB benefits and suffering an early retirement factor reduction with taking benefits at normal scheme retirement age and drawing on a future DC pot to bridge the gap.
Takeup of Me2 was excellent, with 60% of members registering in the first week alone. 30% of all these registered users then accessed the site on more than one occasion, ably demonstrating the clear benefits to member engagement that this approach delivers.
Following this presentation stage, we compiled a Question and Answer document bringing together the various questions that were raised throughout the communication process. ECITB subsequently issued this to scheme members, further enhancing member scheme knowledge and understanding.
"The use of the Me2 portal was felt to be particularly helpful as it enabled employees to see all of their pension benefits in one place, and how the changes might affect their particular circumstances. This was a challenging exercise in terms of complexity and sensitivity. The clarity of Me2 was balanced by Barnett Waddingham’s approach and professionalism - particularly in face to face meetings with affected staff - both have been invaluable and have achieved the objectives of the exercise."
We are truly confident in our partnership approach to providing member communication and engagement, which has clearly benefitted ECITB and has ensured that we adopt this approach for clients so that they too can benefit from collaborative working processes.