Regulator Issues Communications Guidance

The Pensions Regulator has just issued its latest guidance for

pension fund trustees and employers, about principles for effective

member communication. At the same time, it has published a sample

communication for DC members choosing investment options.

The communications guidance

The guidance emphasises the importance of having a clear

communications strategy, tailoring communications appropriately and

avoiding jargon or legalese. The Regulator identifies four key

areas for particular scrutiny: joining, approaching retirement,

changes to the scheme and ongoing, "ad hoc"

communications with members. The document also includes a style

guide of sorts, containing a number of sample communication images

and formats.

The aim is to build on the minimum requirements for member

communications that are set out in the Disclosure Regulations: this

is a summary of practical, rather than legal, considerations. In an

echo of other Regulator statements, it puts the onus on trustees to

"be prepared to challenge their advisers if it appears

that a communication may not achieve what it sets out to

do".

Investment guide for members

This short-form investment guide, called "Making pension

fund choices - think before you choose", has been designed so

that it can be issued directly to members. It was drafted in

consultation with a number of industry parties, including the

Financial Services Authority, and is seen by the Regulator as a

tool to aid trustees and employers in engaging with members. Sample

generic text may prove welcome to a number of schemes, given the

reluctance of many trustees to communicate with members in this

area for fear of crossing the line into providing financial

advice.

Summary and actions for schemes

In the light of a traumatic week on the money markets, which is

likely to have inflated members' worries about investment risk

as well as trustee concerns about managing expectations, these new

initiatives from the Regulator appear timely. Some emphasis on

communication to DC members is also unsurprising, given the

Regulator's own research and the recent report of the Committee

of Public Accounts, both of which showed that governance in DC

schemes remains a significant concern.

Trustees and employers will therefore want to review the

Regulator materials alongside their existing communications

policies. In particular, the investment guide for members could be

used or adapted not only for pure DC schemes, but also for DC

members of hybrid...