The Employee View of Value for Money in Workplace

Pensions

The UK Regulator has set as task for the Independent Governance Committees (IGCs) of
UK DC pension providers to assess how well providers are delivering Value for Money
(VfM) for members.

A number of IGCs, with the support of their UK workplace pension providers, including
Standard Life, conducted a research to develop a common understanding of what
members see as important when assessing value for money and why.

This proved to be a challenging question, not only because of the product complexity, but
also because of the lack of comparability and the fact that employees dont choose
themselves their pension provider.

The research study was co-ordinated by Sacker& Partners LLP (Sackers) and contained
two phases which comprised, a series of workshops with all-day focus groups of nearly 50
members which included discussions before and after targeted education, and an online
survey containing more than 15,000 member responses. *

Key findings:

Good value for money is associated with good outcome at retirement,

underpinned by the total amount of contributions going in, the quality of pension
provision and member experience
Employees are highly concerned about the financial security of their
pension and consequently Controls & safeguards and reputable financially
strong pension provider are both in the top 4 attributes
Charges are not front of mind and are not in the top 10 attributes, the
overall pensions experience being more important
Overall Satisfaction and VfM scores average at 6.2 and 6.4 respectively
Education is highly influential in helping members understand how a
good outcome at retirement can be achieved; once this is understood
members place more emphasis on support and engagement
Matching employer contributions and tax relief rated highly once understood

Improved perception of VfM by employees may be achieved through more effective

delivery of the key attribute however, the challenge is employee engagement.

The research revealed that there are significant gaps in knowledge and misconceptions
around workplace pensions. These are often responsible for discouraging members from
paying in larger contributions.

The research results also highlighted the fact that here is a great opportunity for
employers to increase employee engagement if they bring more clarity by helping their
employees better understand their options and if misconceptions are reduced or
removed. But improving the overall value for money perception, requires ongoing
education and segmented communication.

If you wish to speak to us about driving better employee engagement, our team will be
happy to assist you. Contact us (Button).
*The research was conducted in the autumn of 2016.