A staggering 43% of trustees see improving member communication as one of the biggest challenges they will face this year according to research conducted by our colleagues at Hymans Robertson. This is particularly true for Trustees of DB schemes who face the dilemma of how much to communicate to their members about transfer values and the choices they have after many years of relatively low key engagement.
Being one of the lucky ones to have a DB deferred pension I can say from my heart that if my job wasn't to help trustees communicate with their members about this subject, I would be just as much in the dark as everyone else. I'd simply listen to what I heard in the press - the negatives about people making the wrong decision to transfer out. Without guidance and a fully rounded view of what my benefits are and what those choices mean, I would never be able to make a meaningful decision around this. And it's scary. Believe me.
We've been working with our colleagues at Hymans Robertson to improve this situation both for members and for trustees. We believe that it takes a sustained and long term approach to engaging members to address this challenge and to create a good experience for members that leaves them confident about whatever decision they make.
I know from experience how long it takes to get your head around these different choices when you know it will affect your future income. If you're cautious, there's reassurance in knowing you'll have a steady income from your DB scheme for the rest of your life. And as my father is now 97, I'm looking at this as being a real plus if I'm lucky to see as much of life as he has. On the other hand there are advantages to having the flexibility to choose what to do with the money and let's face it, the tax-free cash is so much better with a transfer value than I'd get within the rules of my DB scheme. There are plenty of other DB members out there who's life situation, health and finances would mean they'd be better off taking a transfer. They'll only know though if Trustees take the time to explain it, provide the right support and really focus on the people involved here.
This is after all about us human beings, with our emotions, our insecurities, our prejudices, influencing a decision that we can't then change back!
We've called our approach to this 'Re-defining retirement'.
