I don’t write much about the importance of members engaging with their pension pots, mainly because it has become a topic perverted by providers more interested in frightening savers into contributing more than they can afford (and sometimes need)

But there’s one aspect of engagement I am reminded is more important than I’ve given it credit and that’s engagement with the employer’s role in providing pensions to their employee’s benefit. To employers this matters a lot.

It’s becoming increasingly clear that bosses will be key to the effective maintenance of workplace pension standards in the key areas of VFM- performance and service.

So long as this work is recognised it will continue. If however employees see their employers as no more than complying with auto-enrolment regulations, it is likely that they will follow suit, contributing no more than the minimum and expecting the Government’s magic wand to do the rest.

It won’t. Complying with auto-enrolment is no guarantee of a fulfilled later life – free from financial worry – though to read the communications of some providers and indeed the Government, you might think it was!

The outcome of all this savving depends on contributions, the investment return and the capacity of individuals to maximise their wages over a lifetime – sometimes an extended working lifetime!

The right kind of engagement

Employers are likely to be asked to assess the value their staff are getting from a workplace pension. They may be required to find a new pension if the existing one is put in special measures. This creates an unwanted obligation on companies , especially smaller companies to treat their choice of pension as an employee benefit. To be rewarded for this activity , they need staff to feel they are benefiting from their care.

Employing providers or even independent advisers to tell staff they are not saving enough is a painful way of promoting this care. People who are being asked to kiss goodbye to money that might be paying for a good night out, aren’t going to do this consistently – unless they feel they are making their money work as hard as they do (or should be doing!).

For some people , this will be about making their money matter – for the planet , for society for a juster system that is fair to all. These are the values that have become known as ESG and they are one way to get lasting engagement with a pension.

Another way is competition. People are competitive and they like to know that if they are investing for the long term, they are getting a good return on their money.

Finally, whether their money is doing well or not, people want an easy way to see how their money is doing and to see they can do the things they need to do like combine pensions, spend their pot and move money between funds, easily and safely. They wpi;d ;like someone to talk to  when they need help and online access to any information they need – when they don’t.

If these things aren’t available – it will become apparent, not least because most other “employee benefits” offer all these things and sometimes more. In tech this is called the user experience and if it is bad, the information gets back to employers who can quickly turn against a provider – even if in other respects, the provider is giving good value.

Michael Ambery, who has charge of many of Hymans Robertson’s larger clients tells me that more employers come to him to change a new scheme , because of poor customer experience than because of poor investment performance or high charges.

Providers are increasingly looking to invest in member service as a “defensive play” , as mindful not to lose existing business as to put new employers “on the books”. Investing in good service does however need to be funded from future revenue and here the beneficial feedback loop from employers become malevolent.

Employers who come to benefit consultants to get great value – in terms of service and outcomes, cannot expect this to be achieved at no cost. News reaches me that this week’s big tender – which is offering £1,000.000,000 ( a billion) in assets has attracted a bid from one provider for an annual management charge of 0.09%

Woe to the employer who accepts that quote and finds no service, no investment return and no happy faces among employees.

Woe to the benefit consultant who promotes that price, consigning generationos of staff to sub-standard service

Woe to the tax-payer, who’s hard earned taxes are wasted on investments that benefit no one but publicly qutoted overseas companies and the gilt market.

For employees to have employee benefits, there must be a realignment between the three VFM tests so that cost is not promoted to the exclusion of value. Otherwise , employer procurement teams, aided by lazy consultants could find their employee benefit a public relations disaster