Occupational pension funds are finding that websites are a cost-effective way to provide information to their fund members. While some funds run simple static websites, providing information on plans, returns and policies, many funds also now incorporate interactive planning tools that allow fund members to calculate benefits.
Because occupational pension schemes generally represent the bulk of an individual’s retirement income, they can provide useful calculators, which can give a decent estimate of other elements, such as state pensions, according to Allen Brown, head of web services at Aon Livewire. Insured schemes, on the other hand, more likely represent just a portion of pension provision, and thus such calculations would not be as useful for the investor.
The Nestlé pension scheme, based at Vevey in Switzerland, has recently revamped its pensions intranet site to include an interactive function and has already received positive feedback. “People are asking for projections all the time,” says Jean-Pierre Steiner, corporate pension director. “Rather than having my people make the calculations, the website does it.” After promoting the new website in internal publications, such as the company magazine and the annual report, Steiner has noted interested from employees in the new site. “The initial number of visits has been quite appealing.”
While interactive modelling may be the newest trend, some websites are doing a better job than others. “The usage of planners is not awfully high, because confidence in the results is low,” says Brown. “People know all the information is in there. But you need to establish trust that the system knows you personally.”
One way that pensions can boost confidence is to personalise their sites, for instance by linking account information into the modeller. Rather than requiring the saver to input basic details using a print-out of the latest benefit statement, some websites allow the saver to log in and pull together all their pensions information, providing it for the modelling program to use.
While most pensions websites are purely informative, some allow savers not only to model changes but also to make them. One that does so is the huge PPM system in Sweden, and it has found very high usage levels – 90% of its savers have obtained information on their pensions over the internet, according to Eva Lindhe, public relations manager in Stockholm.
PPM has 4.9m savers, who contribute 2.5% of their salary to the pension system. They can choose from 600 funds in which they can invest. Each saver is automatically supplied with a PIN number that allows access to the website, where they can obtain information about their pension and make changes online to the way their pension savings are invested, switching between funds.
Usage figures have so far been positive, says Lindhe, and they are likely to continue to rise, particularly as younger savers enter the system. In March 200,000 new savers entered the scheme for the first time, and most of these are young people in their first jobs. “They will be more familiar with the internet,” says Lindhe.
Although usage figures are upbeat, for the most part investors visit their pensions websites infrequently, according to Brown. They go to it only when there are key issues in their lives, such as a job change or a change in personal circumstances, or at times when current events raise curiosity or concern about individual pensions.
However, he emphasises that the websites run by occupational pensions should be seen as a form of education for their members, and infrequent visits should not be a cause of concern. “The site may not be visited at all for a week, but that does not mean that it is not fulfilling the employer’s objective. Education takes longer and is a more gentle process than selling,” he explains.