A great way to deliver the Guidance Guarantee (for the right employer)

Josh Collins
Josh Collins


In recent weeks, I’ve been taking the temperature of the pension trustees of large employers and found that enthusiasm for providing guidance to employees at retirement is limited.

This is understandable. Do trustees want to become surrogate advisers to members in later life? There is nothing in it for them other than the paternalism that got their DB schemes into such a mess.

However , large employers (as opposed to their trustees) may have good reason to involve themselves in the financial welfare of their staff in their later years of work. Offering staff guidance on how to become financially independent of work may be seen at best as a genuine employee benefit and at worst a gentle reminder that there comes a time to move on!

I’ve still to hear from any employer who has plans to offer the Guidance Guarantee, but I know of many employers who offer pre-retirement counselling, both on lifestyle and finances.

It was therefore a surprise when my inbox received a mail from Josh Collins suggesting a framework for employers and union reps to work together with workplace pensions to establish “trust ambassadors”.

You may remember Josh as the fellow behind the “pension-linked-mortgage” idea. Josh is still at University and is best described as an “enlightened entrepreneur”, who (quite fearlessly) is taking on pensions in his early twenties.

I quote his idea in full.

The promise of ‘guaranteed guidance’, as well as a concern over a lack of member engagement are two topics which came up during last week’s Workplace Pensions Conference. Very little seems to be known about what can be done to improve the condition of the two, and particularly in the case of guaranteed guidance, even less seems to be known about what needs to be done.

I believe that there is a solution which addresses both concerns, and in a highly cost effective way. I believe that the solution is something that members will appreciate and respond to positively, unions will support, and could potentially place an individual responsible for guidance on pensions within each place of work at minimal expense. The concept could also lead to increased member engagement, which is of course important. While trustees and advisors of course have the academic ability to find solutions to raised issues, the issues themselves may only become apparent to those on the ground floor, the members. Through my own experience, I also believe that some members could even offer viable solutions that trustees could implement, saving valuable resources.

The concept also isn’t unprecedented, with prominent organisations such as PwC, and the GMB Union already working with their own variation of the system. As an example of how this idea would work, and what it actually is, I’ll begin by explaining the role of GMB’s workplace representatives (reps).

The position of GMB’s workplace reps are offered to members within each company which recognises the GMB. Reps are given training in basic employee rights, which they can then feedback to other members within their place of work. The system is simple: train one person, who then help others, allowing for prompt assistance in simple cases, and freeing up time for more senior Union officials who can then focus their efforts on more complex cases.

The reps are only trained to handle routine matters of course and offer simple guidance. For more serious cases, the reps help the union member by telling them who to speak to for further assistance and helping them understand their responsibilities at that point in time. Reps are then able to feed back the most frequently raised, and the more serious concerns of the members, meaning that instead of handling feedback from say 100 people within a company, they only receive it from 1. Albeit, there will be much more feedback, but ideally the more trivial cases will have been dealt with by the rep so the number of issues should be reduced significantly (of course members can still feedback directly instead if they so choose).

From an employer’s perspective there is minimal disruption, reps are appointed from within the company and are expected to continue with their usual responsibilities. Again from my own experience, I can say that guidance is usually offered during designated breaks. This means that the only cost involved is for the training, time spent as a rep is unpaid. In fact, companies such as ASDA appreciate the role of the rep so much that they are guaranteed a place on the colleague voice (a kind of council which again is designed to feedback the concerns of individuals).

The most endearing twist here is that these representatives work in this role for free, in fact they essentially pay to be in the role because they need to be a paying member to qualify. This might seem like exploitation, but nobody is forcing individuals into these roles, and admittedly not everywhere has a rep as a result. However the role is seen as an excellent development opportunity, and similar roles are found within graduate recruitment. I’m actually registered as a PwC brand ambassador, which is similar.

Brand ambassadors do usually receive some compensation, although it is unlikely to be cash. Instead students take advantage of the opportunity because of the opportunity to undergo specialist training, to enhance their CV, and to learn more about an organisation. Reasons which I believe would be similar to union reps.

Some of the benefits to the organisations are of course clear. Organisations enhance their human resources at minimal expense. However, there are further benefits. One of the main ones being that the role presents individuals to members/students whom they can relate to. This would be particularly beneficial to the pensions industry, which is often seen as an industry for older generations- especially considering the fact that it may be younger individuals who would be interested in this kind of role to gain experience and enhance their CVs.

The role of the workplace rep is fairly long standing, but the brand ambassador is new and gaining momentum. Towers Watson, for example launched their new brand ambassador roles this year.

I believe that pension trusts should consider similar roles. Trust Ambassadors could be trained into further detail than other members, being trained in basic rights and responsibilities, who to contact for what and when etc. The ambassadors could also encourage feedback simply by being somebody that the member is likely to know, the comments could then be fed back to independent governors and/or trustees. Setting up training for the millions of individuals within the UK can be a slow and expensive process, similarly setting up telephone advice centres can be costly and could continue to present a distance between members and trustees. There may also be a reduced chance that members would engage with these methods in anyway other than for the guidance (if at all). Placing a Trust Ambassador within each place of work could make the pensions industry more approachable and would only require the cost of training the ambassadors (although it would be beneficial to offer some form of formal training to individuals, the ambassadors could supplement that training).

It is of course unclear at this moment, what will be required in terms of ‘guaranteed guidance’, but one aspect which has been discussed frequently is the fact that guidance is not the same as advice. Trust Ambassadors would be unlikely to receive the kind of training which would qualify them to offer formal advice, but I believe that it would be perfectly reasonable to ask them to offer guidance. It may also be that this system doesn’t fit into what the government expect from guaranteed guidance, however not only could this approach prove cost effective, but if this guidance is to be given by April 2015, there aren’t many ways which could pass on the right kind of information with the speed and efficiency as the word of mouth offered by this system.


This article was first published in ww.pensionplaypen.com/top-thinking

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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