7. Championing pensions

When membership levels of company pension schemes are high then employers are more reluctant to make cuts to the benefits on offer. The need for a high level of pension scheme membership is a lot like the need for a high level of union membership — it’s a stronger position from which to defend schemes from cuts or closure (USDAW Pensions Awareness Campaign).

Restoring the earnings link, supporting auto-enrolment, the new coalition government seems quite willing to take forward many of Labour’s plans for pensions. But the proposed commission on public sector pensions, continuing pensioner poverty and the certainty any day now of another employer wanting to scale down pension commitments make this an issue to organise around.

Communicating with members

Work carried out for the DWP’s Pensions Education Fund (PEF) from 2007 onwards, proved that union reps are well placed to get the message across in the workplace and that the direct approach — whether it’s one to one or with bigger groups — is an effective way to do it.

Lots of people are turned off by pensions and see them as a complex headache or something to worry about “tomorrow, not today”: “There are far too many people who do not join generous employer schemes”, said TUC general secretary Brendan Barber at the launch of the TUC’s Pensions Champions campaign.

The problem is that as well as those who can’t be bothered there are people who believe they can’t afford to join a pension scheme, and who may still hold that view when auto-enrolment and NEST start to be introduced.

A UNISON survey of its local government members in 2008 found a minority not in membership of the Local Government Pension Scheme (LGPS) even though it is already an auto-enrolment scheme and provides relatively good pension benefits.

Altogether, 87% of members surveyed were in the scheme but the lowest paid, part-timers and temporary workers were least likely to be in it and cost seemed to be the underlying reason. Only a quarter of these believed encouragement by their employer would make a difference and quite a few more were uncertain.

Apart from money there are also issues of confidence. Only a third of people (34%) surveyed by the National Association of Pensions Funds (NAPF) were “quite” or “very” confident that their pension will give them sufficient income in retirement.

Guarantees that they will not lose any of the money they put in, and that their money will not run out before their die were the two main ways to increase confidence in pension saving. Despite confidence-knocking pension scheme closures people are still more likely to trust their employer to provide a pension than to trust the government. And three-quarters would see their employer in a more positive light if they provide a workplace pension.

When Pensions Champions set out to raise awareness about retirement and pensions in the workplace, the Department for Work and Pensions (DWP), which funded that work between 2006 and 2009, had particular targets in mind: Young people, black and minority ethnic people; women about to re-enter employment and also the self-employed.

But the union reps and others who got involved through the TUC and General Federation of Trade Unions (GFTU) found that it was mainly older workers, closest to retirement, who most wanted to discuss the issue. Those taking part — shop stewards, conveners, Union Learning Reps and some with experience of being a pension scheme Member-Nominated Trustee — were placed to promote awareness and make the case for pensions in workplaces where unions are organised.

They are able to use existing resources to communicate, and more likely to be seen as giving “disinterested” information, compared with employers, pension sellers or the government. However, they are likely to need training and support to feel confident in this role — all of which takes resources — may also need the co-operation of employers.

Information and awareness

Although there was a general awareness among those taking part in the Pensions Champions initiative of the difference between information and advice “training should emphasise the distinction at every opportunity”. One participant said: “The one thing they were quite serious about was that if someone draws you in to give financial advice, you must not (give it). We are not qualified to give that advice ourselves”.

The Pensions Regulator cautions employers too against giving financial advice, which should normally be given by someone authorised by the Financial Services Authority. Instead they should focus on “giving the facts and generally promoting the scheme”. This is advice union reps should also take into account.

Employer resistance to the Pensions Champions initiative was rare, DWP research on the project suggests, but there were barriers to be overcome including: lack of awareness among the workforce, a lack of confidence among champions themselves and a lack of interest among potential scheme members.

Posters, leaflets and flyers, including champions’ mobile numbers, proved useful, allowing members to contact them with queries or arrange an appointment for a more in-depth discussion. “There was some concern that … online tools were pitched at a level that was too advanced or sophisticated” for workers who are often low paid and have little knowledge and understanding of financial matters.

However, online resources including the Pensions Doctor tool from the TUC Worksmart website have been widely used, and there seems to be a real advantage in getting members to use this or similar websites forecasting state pension and Pension Credit entitlement for themselves. They frequently require a certain amount of information and paperwork so a trial and error approach works best. A number of resources of this kind are listed below.

There are many more ways to take the pensions issue forward. Pensions information was translated into Polish and Braille by Community’s Pension Education Project and union staff were trained in pension awareness and presentation skills.

Pension funds are big investors and carry a lot of “corporate clout” and this is another way of engaging with the pensions issue. UNISON’s Capital Stewardship Programme and the Fair Pensions campaign are further examples of how engaging with the pensions issue can provide new channels for union action.

Merchant Navy Officers’ union Nautilus UK set up a Pensions Association to represent members of the industry-wide pension schemes, after a difficult valuation, and its members play a full part the scheme’s Trust boards. According to assistant general secretary Paul Moloney :“The most important step a union can make is to ensure that it has Member Nominated Trustees appointed to the Trustee Board and that they are equipped with the skills to enable them to do the job properly”.