Why employers should encourage pension engagement - and how to measure it

Providing a workplace pension plan is a fundamental step in supporting employees’ long-term financial security.

But the real value of your workplace pension only comes when your employees actively engage with it. Engaged employees are more likely to make informed decisions about their financial future, leading to better retirement outcomes.

This proactive approach to retirement planning can alleviate stress and improve overall well-being, translating into a more focused and productive workforce.

And demonstrating your commitment to your employees' financial health can enhance your reputation as a desirable place to work, helping with talent retention and attraction.

The challenge of measuring engagement

Promoting engagement with pension plans is clearly beneficial, but measuring this engagement can be a headache.

Engagement is complicated, so you need to look at a range of behaviours to get a good picture of where your workforce is, and track your improvement.

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Key indicators to measure pension engagement:

1. Contribution levels

One of the most straightforward ways to measure engagement is looking at the level of contributions.

Employees who choose to put more than the minimum amount into their pension are likely to be more engaged. This behaviour indicates a proactive approach to retirement planning and a greater understanding of the importance of saving for the future. Tracking changes in contribution levels over time can give you an insight into employees’ growing engagement and confidence.

2. Active investment choices

Another indicator is whether employees are actively choosing their own investments, instead of relying on default funds.

Those who take the time to select specific funds or adjust their investment strategies are showing a higher level of engagement and financial literacy. It suggests they’re not just passively participating in the pension plan but are actively managing their investments to optimise their retirement savings.

3. Pension consolidation

Pension consolidation is a strong sign of engagement. Employees who take the initiative to consolidate multiple pension pots - for example from previous employers - into a single, manageable plan show they’re serious about their retirement planning.

4. Online engagement

Both the rate of registration and the frequency of use for online pension portals are key indicators of engagement.

5. Beneficiary nominations

Nominating beneficiaries is an often-overlooked aspect of pension engagement.

Employees who take the time to tell their pension provider who they’d like to inherit their pension when they die are demonstrating foresight and responsibility. Tracking the number of employees who have nominated beneficiaries can be an effective measure of engagement.

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How RewardPro can help

At RewardPro, we specialise in connecting your workforce with their pensions.

From informative articles and engaging videos to interactive tools and calculators, we offer a comprehensive range of content and tools designed to increase pension engagement. By simplifying complex pension concepts and providing clear guidance, we empower your employees to make informed decisions about their retirement savings.

We can help you foster a culture of engagement that benefits both your employees and your business. If that sounds good to you, we’d love to chat.

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