Firms urged to provide pension information to employees
Wed, 26 Aug 2009
Businesses should do their best to keep staff informed of pension options, it has been claimed.
Danny Cox, head of advice at Hargreaves Lansdown, said individuals who do not closely follow their pension or investments should be able to go to their human resources department to access information that is relevant to them.
He stated: "How this information is communicated is very important because providing substantial amounts of information in an easily readable format to employees means that people can work their way through their options without having to take advice."
Mr Cox was commenting after research published by Prudential indicated that nearly 2.5 million pension scheme members have never checked how their fund is performing.
The study indicated that with many people still not setting enough aside for retirement the emphasis may fall on companies to ensure their staff are fully informed about how their pension fund is performing.
According to Mr Cox, problems potentially arise when there is a need to take advice – something which has to be paid for and is unlikely to be offered for free by employers.
He added that the reason companies have a default fund is so that staff are forced to make a decision on a pension if they cannot make one for themselves.
"So, the selection of the underlying default fund when you are setting the pension scheme up is very, very important," he noted.
From 2012, employers will be legally obliged to enrol staff members into a pension scheme.
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