Things have got a little tight in the corporate pensions space. A recent call and exhortation went out for employers to be more responsible about helping employees understand and value what provision is available to them in the workplace. Paul McMahon, managing director, AXA Corporate and Benefits advanced the usual ”stimulus-response-chain” about employer responsibility, employee engagement, maximizing, outcomes, and endgames.
Citing an experiment Axa ran which put people through a week surviving only on the state pension of £95.25 – I think it was an experiment – not unsurpringly enabled them to discover people obsessed about two things money and food.
I find the hallmarks of responsible employers are also similarly obsessed about two things, running a business profitably, and meeting staff payroll. To be fair it’s McMahon job to create a market and many might agree with his conclusion:
“Now while that isn’t an appropriate method to apply across whole workforces, there is a need for greater creativity to find the engaging and interactive communications programmes that will break the cycle of opacity and inertia that too often prevails when it comes to long-term financial management.”
…if you can find anyone that could understand it.
The AXA £95.25 experiment was cited as the most influential they ran. They actually ran a more influential one in 2009 that smashed profits by 82 percent down from 5.6bn euros to 923m euros, quickly followed by axed jobs (no pun intended) and a bar on withdrawals from once high-flying funds.
Well that’s one way of breaking the “…the cycle of opacity and inertia that too often prevails when it comes to long-term financial management.” I think it has broken it down very well.