How do we bring DB members into the light?
- Lesley Heath
- Mar 4
- 3 min read
In the last couple of years there have been 2 major studies into the needs of DB Members [1].
Seems strange doesn’t it, that the need for insight comes as most DB schemes are winding up and looking at their end game strategy.
This is because the general perception of a DB pension scheme member is “oh, they’re OK, they’ve got a gold standard pension, they don’t have any worries”.
Wrong.
DB members are human beings. Not some generic identity. They have the same concerns in life and, for some, these concerns can be brought into sharp focus at moments of change.
Moments of change in their lives – divorce, bereavement, ill health.
Moments of change brought about by lifestage transition – pre-retirement into retirement.
And moments of change brought about by the provider of their pension. The recent study by Standard Life concluded that there was a general level of understanding of their DB pension until something changed – such as a notification that their pension is moving to an insurer – through something referred to as a buy-out.
If you aren’t embedded in the pensions industry, the term “buy-out” could be quite anxiety inducing. It’s not the sort of language that fills you with confidence – potentially has the connotation of a business going into administration.
So, DB members may be ill-equipped and under prepared to deal with change.
For those yet to retire the retirement planning landscape is potentially even more confusing – the 2024 DB Member research carried out by Just Defined Benefits highlighted that someone reaching the point of retirement may well have an average of 4 sources of retirement income and potentially more. For someone anxious, ill-prepared and confused this is a daunting prospect.
And now the fun really starts! Who can DB Members turn to? Many don’t even know who their pension is provided by and some even think their pension is provided by their bank! For some then, ChatGPT (or other available AI providers!) may be the solution.
“ChatGPT – how much do I need to retire on?”
“ChatGPT – when can I retire”
“ChatGPT – explain the taxation of my pension”
This morning (4.3.26) I attended one of QuietRoom’s, as ever, informative webinars on the topic of “AI for pension comms”. Exploring how the rapid increase in use of AI will impact pension decision making. Certainly, right now – high risk and not to be relied upon.
What can be done about this increasingly murky situation?
It’s never easy, but small steps can make a big difference.
3 to-dos for providers and trustees:
1. Communicate promptly, succinctly and clearly with relevant information throughout your relationship with your DB Members. Hold their hand, help them understand what is happening and what they need to do.
2. Provide easy access to information that helps the DB member understand the wider context of their DB pension – legislation, regulation, developments.
3. Signpost members to where they can access help when decisions and actions are being taken.
I acknowledge these seem so straightforward but are difficult to implement in practice.
Critically, success depends on the member being clear as to why it matters to them and for them to have provided the means to be contacted!
I’d be happy to talk to anyone who needs to put in place the right communication and engagement for their DB members, just email Lesley@barley-marketing.co.uk.
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