With the roll out of automatic enrolment completed for all UK companies back in 2018, employers may be forgiven for thinking that their role in talking to employees about pensions is now over.
But many employees who have been automatically enrolled may not have much idea of which pension provider their employer has selected for them, let alone how that provider is investing their money for their retirement.
For employers, there is a great opportunity to showcase the benefit you are providing for your employees by contributing to their pension pot. For example, you could simply encourage your employees to activate their account if they haven’t done so already, or you could start a discussion as to how their pot is invested and if that’s in line with their values and beliefs.
How to start the conversation?
One great way to open the conversation about pensions is to make them real to your employees, by linking them to present issues we see today. Take climate change for example. People may not realise that their pension funds are doing things to protect their pension pots from climate change risks and are supporting the transition to the low carbon economy by investing in environmentally friendly projects such as windfarms and solar parks.
The importance of investing responsibly at Nest
At Nest, investing responsibly is a core part of our investment approach, including for our default funds, where the majority of our members are invested. With over 8 million members and over £8bn of assets under management, the way we invest can have a real impact on a company’s behaviour.
In a recent member survey 73% of those asked said the consideration of environmental and social issues matter to them a lot when investing their money.
We also asked our members questions like ‘How would knowing that your pension provider is considering environmental and social factors when they invest your money make you feel?’. The highest response rates to this question were for ‘Happy now I know that they are doing the right thing’ and ‘Happy but I would expect them to do this kind of thing anyway’. This demonstrates our members’ interest in responsible investing and confirms there is a certain expectation that a scheme would be taking these issues seriously.
So why not start the conversation with your workers about their pensions today? Visit our responsible investment page, which is aimed at helping members understand how we invest their money responsibly.