1 April 2020
With so much uncertainty at the moment, it’s understandable that your DC members may be feeling a bit nervous about their hard-earned pension savings.
While there isn’t an easy solution, and it’s going to take time for markets to recover, there are steps you can take to help ease your members worries.
1) Don’t be afraid to communicate, even if you don’t have all the answers
As trustees, employers and advisors, we are often reluctant to issue communications to members unless they contain all of the possible information we can include. With so much noise surrounding the virus and its impact on our lives, it’s important to focus on the key messages. Tell your members that you are aware of the impact and that you are taking the steps you can to help. Let them know who to contact within the company if they are struggling and need some support.
2) Find out what your provider is doing, and let members know
Providers have not escaped the effects of COVID-19, and their ability to continue offering “business as usual” support to members varies. Some have closed their call centres with an intention of opening again in the next few days, while others have closed indefinitely. Direct your members to the online support that is available from the provider, as well as other resources such as the Money and Pensions Service or any materials you may hold on your internal intranet.
3) Remind your DC savers that pensions are long-term investments
In times of uncertainty, people can make knee jerk decisions and decide to make significant changes to the way their pension savings are invested. Snap decisions could lead to unintended consequences. Remind your members that they are long-term investors.
4) Think about how you can help your members who are closer to retirement
If you have members that are close to their Target Retirement age, you may want to encourage them to consider their plans carefully. This is especially important for your self-select members; understanding the potential impact of recent stock market performance and its impact on savings will be particularly important before they decide what to do. Let them know that it is understandable to be concerned at present, and encourage them to take financial advice (and remind them of how to find a suitable advisor).