New guidance from The Pensions Regulator
19 September 2008
'Effective member communications' is the latest in a series of guidance on governance and The Pensions Regulator (TPR) is paying increasing attention to this area because it feels that a large number of schemes may need to significantly change their approach in many aspects of scheme administration.
Clive Pugh, partner in the Burges Salmon pensions team comments "The Regulator has spelt out that it wants to see frank, clear and digestible communications with members. My view is that TPR will rely on this guidance when reviewing or changing trustee boards – so satisfying these principles will be key".
The guidance is addressed to both occupational schemes (trust based) and personal pension schemes (contract based). It focuses mainly on written communications but the principles will apply to all types of member contact.
TPR's proposals for successful communication are:
- identify your objectives and have a clear communication plan
- work out the best ways to communicate
- know your audience and tailor your communications to it
- remember deferreds and pensioners as well as active members
- be open and honest
- no jargon
- really engage with your members
An effective communication will have:
- impact – grabbing members' attention
- clarity – so they can understand easily
- accuracy – so they have full and reliable information.
Communication should be regular but there are times when it is particularly important, e.g.:
- before someone joins
- approaching retirement
- times of change e.g. of scheme design or changes of investment options
The guidance also has practical examples showing how good design can improve the effectiveness of written material.
The principles seem clear and fair – however in practice we appreciate that it can sometimes by challenging to explain complex and wide ranging issues in clear and concise plain English. This will be a challenge and Trustees are right in our view to ask their advisers when they are drafting member communications "can we put this more simply" and "have we put the message across clearly."
The guidance can be accessed through the following link :-