Popcorn pensions

We’re used to bosses telling us that we’re the company’s greatest resource.Britain is a service led economy and even in an increasingly digital market, the human resource is expensive to acquire and to replace. If you have a good workforce, the cheapest option for you as an employer is to maintain them as your workers.

Of course there may come a time when you rather hope they will move on, but for most employers , this is when people get to an age where it may be better people wound down , with a succession plan in place to pass on skills and knowledge. The orderly transition over generations is the business justification for spending money on a workplace pension.

But there is another reason, which in the past I’ve called the Popcorn Pension. I always found taking kids to a cinema , that putting that extra bit into the cinematic experience by getting them to choose popcorn, made a good film into a great night out. I like Popcorn as a metaphor for Pension PR because it isn’t harmful and  punches a whole lot above it’s weight.

Show them the pension!

Popcorn pensions were on my mind when I started Pension PlayPen. It seemed that employers that could make a virtue of a necessity and show their staff that they did give a damn about the workplace pension, were going to get the “popcorn” dividend that I got with the kids at the cinema. A couple of quid extra, showing staff why and how they chose the workplace pension seemed to fit that bill.

I know you cannot measure staff loyalty and the extra productivity of a happy workforce on a balance sheet, and you can’t manipulate business forecasts to show low turnover because of a pension plan. That is counter to the mark to market accounting system we have. But any entrepreneur builds his business on an expectation of doing things better than the next business.

While accountants are slow to get pensions, entrepreneurs aren’t, precisely because they – like pensions are visionary. An entrepreneur builds a business for a whole load of reasons but all of them coincide in the idea of “legacy”. We are driven by a wish not just to build something worthwhile, but to be seen to build something worthwhile. The workplace pension is a part of that legacy construction.

So I simply don’t buy the idea that auto-enrolment is all about compliance, I never have and I never will. Auto-enrolment is about democratising pensions in large organisations  and about linking small employers to that legacy vision via pensions – hopefully well presented “popcorn pensions”.

A vision of pensions that is coming true

For an increasing number of employers, the chance to choose a workplace pension in an informed way is now as easy as buying a new chair for the office. Subsidisation through payroll software means that many employers can even use Pension PlayPen for free.

That means that employers can show their staff how and why they chose the pension that they did and makes the choice of pension part of the employer’s duties, compliance becomes a pleasure when your staff thank you for it.

The tyranny of old school auto-enrolment thinking , the “you get what is coming and don’t ask” school of thought, leads to a devaluation of the human resource and makes the payment of monthly contributions, the management of the enrolment and re-enrolment process and the ongoing communication of the workplace pension a chore.

It shouldn’t be. Pensions are part of pay, pay is the best bit of the job and deferred pay through a pension is no less valuable (over time) than the money that hits your bank account at the end of a pay period.

I am really proud that every month, hundreds of companies are using Pension PlayPen. I know that within the next quarter, those hundreds will be thousands as more and more intermediaries and employers demand the pension is chosen in an informed way.

The platform to rebuild pension contributions to proper levels

Employee’s don’t mind being told they are valuable. I may have moaned at the cliched language of the CEO, when he – Mr Grace like- told us “we’d all done very well” but I didn’t mind. So long that is as his words were backed with actions.

Too many employers mouth the words but don’t walk the walk. Of course choosing a pension well is just the start of the journey. The worker who believes that a 1+1 contribution structure will get them a decent pension is nuts but the employer who lets them think this is even more nuts.

Employers should be looking for employees to engage with their workplace pensions and to contribute more than the minima. Employers should be looking to use the generous tax and national insurance breaks available to pay a higher percentage of salary through pensions than the bare minima. Ideally the one type of contribution encourages the other through matching pension contributions.

But we cannot throw great wedges of payroll at pensions if we do not have confidence in the pension in the first place. Choosing a good workplace pension is the platform for what comes after.

Engagement trumps compliance

We have made a mistake in allowing NEST to be promoted as the Government’s pension and to be described by senior civil servants as a safe harbour. It is a good workplace pension but it needs to be chosen and not just “on-boarded” as part of an “exercise”.

If we are to restore confidence in pensions, we need employers to engage in pensions, educate themselves in what counts for good before they can empower their staff to make good use of them.

Pay attention to the pension, if you don’t – your staff will notice – and they’ll notice because someone next door – did!

Random expression of a happy chappy!