Pensions strategy is now moving to the HR agenda.

Last week I facilitated a discussion at an HR Directors event on how employee benefits can be used as a tool to enhance recruitment, retention and the productivity of your workforce. The general consensus amongst the HR professionals who attended was that it is the “non-financial” benefits of working for an employer such as flexible working and on-site childcare which are influencing retention rather than the pension scheme offered.

This is further supported by some recent PWC research interviewing employees in the UK

where “72% of employees said a closure or reduction in their pension provision would not impact a decision whether or not to stay” and “only 12% of employees said they consider the generosity of an employer's pension scheme when deciding to accept a job offer”. The exception to this seems to be those working in the public sector who are striking on November 30^th!

So what is the role of the employer?

Pensions strategy is now moving to the HR agenda. Agreed that finance will continue to play a vital role in the DB environment, but with many DB schemes now closing to future accrual, de-risking on both the liability and asset side now being pulled under control, HR need to be taking a more pro-active role. HR should formulate their own point of view on whether pensions have a role to play in their Employee Value Proposition or whether they allow Finance to continue to drive the agenda from a purely cost perspective.

Granted pensions will not form part of HR's “pay for performance” or talent strategies, but they do have a role to play in supporting your company culture and the relationship your employees have with the company. The cost of providing pension schemes, even in the new DC environment is significant so make sure you are getting a good ROI by ensuring your employees are better engaged, educated and informed about the need to save.