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Survey Report

Financial wellbeing – increasing flexibility

Chapter two of the FTSE 350 DC Pension Survey 2020

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By Richard Sweetman | July 13, 2020

Financial wellbeing continues to be an area of importance for organisations, and seems to be most prevalent amongst those that have adopted bundled solutions; master trusts in particular.

The results of the FTSE 350 DC Pension Survey 2020 show that employers are taking some concrete actions to support financial wellbeing. About a quarter of companies offer an alternative savings vehicle alongside the pension scheme (up from 22% in the 2019 Survey). Offering such an option is much more prevalent if a master trust (35%) or contract-based vehicle (33%) is used compared to 15% for own-trust.

Furthermore, 11% indicated that they were very or extremely likely in the next two years to change the pension plan design to allow employees to divert some element of the pension contribution to an alternative savings option.

We know that introducing financial wellbeing initiatives is an emerging theme for many organisations. Indeed, this might be an increasing area of focus as the world emerges from COVID-19 with the UK Willis Towers Watson COVID-19 Benefits Survey (April 2020) highlighting that financial wellbeing was a top three priority for employers.

It can be difficult to know how to launch a financial wellbeing programme, but evidence suggests that using a review of the pension scheme as the catalyst for introducing a wider solution can be effective.”

Richard Sweetman
Senior Director, Financial Wellbeing Lead

Employers are also interested to measure the success of their financial wellbeing programmes. For example, for FTSE 350 companies, 36% have already taken actions to measure the retirement outcomes of pension scheme membership, while 54% have assessed engagement levels with pensions schemes.

As noted elsewhere in this report, most employers are also looking to improve the support they give employees, and pension scheme members, to choose the right retirement option.

A big component of a Financial Wellbeing programme is communication, engagement and education. Encouragingly, most employers (68%) now offer some element of on-line resources to support financial wellbeing. However, the survey shows that employers with own-trust DC schemes, which includes many FTSE 100 companies, are least likely to provide this level of support. Only 50% of own-trust schemes have on-line financial wellbeing resources. This might be something to address for employers which have decided for good reasons that they wish to retain this choice of vehicle – providing online financial wellbeing support alongside an own-trust pension scheme is no longer insurmountable as technology now exits that is agnostic to underlying platforms and an engagement ‘overlay’ can be easily delivered for these larger organisations.

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