The Covid-19 pandemic has presented many operational challenges for consultants and providers in the DC pensions market.
However it has also created opportunities to trial news ways of working, and promote digital communication strategies to improve engagement levels.
Many of the consultants attending a roundtable, Engagement – Connecting in a Time of Crisis, said these online and digital communications tools had proved popular, with both clients and members, and had helped boost engagement levels.
Video conferencing platforms, such as Zoom, have been widely used across the corporate sphere to help companies keep in touch with employees and clients.
Premier head of employer services Sue Pemberton said this technology enables consultants to offer a more bespoke service while still interacting with clients and members.
“There has been a significant turnout to many of the Zoom meetings and webinars we have put on for clients. At a recent meeting there were 220 employees who tuned in to one webinar. This is a far higher number that we would expect if we were doing on-site presentations and meetings,” she said.
She said this digital engagement offers benefits for both employees and the employer. “We find that there are a lot more questions from employees. They are not necessarily visible, and can send questions by text, so they don’t feel exposed asking questions. The feedback shows a lot of engagement from members who want to know more about their pensions and wider benefits.”
From an employers’ view she pointed out that this digital delivery mode can be far more cost-effective and offers a better use of employees’ time. “These
types of meetings tend to be more concise. In an office people are milling around afterwards and going for a coffee. Here people can log on and get the information they need. There is less of an impact on productivity,” she said.
But is this increased engagement partly the result of much of the workforce being stuck at home at present? Will webinars be as well attended once office life starts to return to normal?
Redington head of defined contributions Lydia Fearn said this increased productivity and engagement is certainly apparent in online meetings with trustees and clients. But she said it remains to be seen whether people will engage to the same extent when they are back in an office, or out and about meeting clients.
Pemberton added that Premier was seeing more engagement with these video conferencing webinars, prior to this coronavirus pandemic, and she expects this trend to continue. This was a view is shared by Barnett Waddingham partner Damian Stancombe, who says that this crisis is accelerating certain positive trends within the DC pensions market.
Those attending the roundtable said that while there was a clear line dividing working practice before and after the coronavirus outbreak, there is likely to be less of a clear cut distinction when it comes to easing the economic lockdown.
As a result these kind of technologies — which facilitate interaction while reducing social distancing — will continue to play be an important part of the consultant’s tool kit.
Aegon managing director, workplace business Linda Whorlow predicted this ‘new normal’ is likely to be very different to what went before, with more flexible working hours and social distancing guidelines remaining in pace for the foreseeable future.
She said: “We would like to continue to have an onsite presence at some point in the future, but there may be a different blend of digital and face-to-face options in the post-Covid environment.”
The Covid crisis has changed much in the workplace pensions sector, including increased digital communication and enhanced engagement from members, but Cowry Consulting’s chief choice architect Jez Groom said that the industry can’t assume these changes will ‘stick’, people may revert to their old behaviours once the crisis is over he says.
“There is a real opportunity here,” he said, “to build on this digital engagement with proper investment in its infrastructure. This can benefit members across the board, whether they have a pension pot of £30,000 or £500,000.
“These members have a good experience at present. Providers can facilitate easy onboarding and log-ins. The hard work needs to be done now though to create the experience that locks in these behaviours.”
Pemberton did not agree that things will rapidly “revert to back to the norm”. Much will depend on how often and for how long people get used to using these digital services. “If it becomes a habit then I’d expect to see this carrying on in future,” she said.
The challenge for providers and consultants is providing a service that does not lose the human touch she said.
Whorlow argued that technology offers the opportunity to ensure that member communications are more tailored: for example by using personalised video statements. These can encourage richer engagement experiences, and evidence suggests this can be an effective way of presenting information that can easily absorbed by individuals.
Groom added: “Providers have a duty of care to all their customers, and in the rush to provide services for members that are comfortable in an online environment, using apps and video statements, there is the danger that the needs of cohorts, particularly more vulnerable customers might get lost.”
Many at the roundtable said the widely predicted move to more flexible working patterns could benefit the industry. There are cost savings to businesses, and it has the potential to improve wellbeing and work-life balance for many employees.
However Groom pointed out that companies should not automatically assume this will be beneficial for everyone. He said while some will be more productive without a long commute and may welcome more flexible hours, it was important to remember that many people to not have adequate work spaces in the home, and may have difficulty setting boundaries between their working and family life.
“Businesses are likely to make substantial savings on office costs.
We would like to see some of this invested in their staff and ensuring suitable working from home environments, not just a laptop that’s connected to a secure server.”
This new working environment may provide a challenge for the pensions industry, but many have adapted and are continuing to provide a full consulting service for clients.
However some advisers said despite being able to offer a full service, the crisis had had an impact on new business levels.
From a provider’s perspective, Aegon said the lack of face-to-face contact had not stopped the company pitching for, and winning new business — it had been involved in about half a dozen online pitches in recent weeks said Whorlow.
But while some providers were leading the way in a digital-first environment, the consultants on the panel agreed that provider service standards had varied across the industry, with many struggling to offer a full service delivery, particularly in the early days of the lockdown.
LEBC director Kay Ingram says: “There were certainly some difficulties initially, particularly around issues of wet signatures, or of forms being sent pre- lockdown that were stuck in head offices.”
She added that the private client side of LEBC’s business found banks and building societies were particularly inflexible.
Part of the problem, she said, was that many people thought this lockdown period might last just two or three weeks. “As it became apparent it would last much longer, companies have put policies and processes in place to cope with these changes.”
Fearn said it is clear that some insurers and fund managers have coped better than others. Part of the problem, she said, has been an increased demand from clients and advisers for information, although she points out that this is starting to “calm down to more manageable levels now”.
Hymans Robertson DC consultant Greer Flanagan agreed: “Some providers have taken longer than others to adapt to the current situation, but everyone seems to be up to speed now.”
Pemberton also thought there has been discrepancies in provider service standards. “Some have done well, others have struggled. It has been frustrating, particularly when it comes to member helplines. Given the current crisis there has been increased demand for these services from members, but the level of support available from some providers has reduced.”
One of the issue for consultants has been the complexity around pensions and benefits, particularly for companies who have employees on the Government furlough scheme.
One key area of complexity has been around staff who had previously opted for salary sacrifice, as the payments they receive from the government relate to the level of take-home pay, once this salary sacrifice has been made.
Ingram said this is an area where consultants can provide valuable information and advice for employers, not least explaining the regulations around this.
“It’s important that employers aren’t seen by The Pensions Regulator to be encouraging people to opt out of pensions. There will be members who opt out as a result of hardship. Technically employers do not have to re-enrol them for 12 months, but we think they should use their discretion and allow them to rejoin earlier, if that is possible. There are a lot of technical issues around all of this that employers need to take on board,” she said.
Pemberton added that while some of the communications are centred on complex regulations there is the opportunity for consultants to tell “a very positive story” when it comes to wider benefits issues.
“Salary sacrifice doesn’t just affect pension contributions. Employers – and employees – will want to know if it impacts others benefits, such as death in service benefits or any income protection that is in place. In most cases insurers have been very supportive of maintaining benefits at the pre-furlough salary level,” she said.
“Alongside this there are other valuable benefits that are available on medical insurance and other group risk policies — for example access to a virtual GP and counselling services. We’ve seen some insurers extend these additional benefits at this time to help support employee wellbeing. This is a very positive message to communicate and shows the sector working constructively through what have been very challenging times.”