Poor member communications risk adding significant delays to the pension scheme buyout journey, Hymans Robertson has warned.

It argued that member communications should be treated as a core part of buyout planning and not be seen as a box-ticking exercise.

The consultancy’s report, Getting member communications right on the journey to buyout, found that 67 per cent of members saw confidence in their pension being paid for life as their top priority.

Clear communication was key to ensuring member confidence, Hymans added, and trustees risked leaving communications too late amid increasingly condensed timeframes.

It warned that this could lead to confusion and the erosion of confidence among members, potentially resulting in complaints and buyout delays.

The report highlighted the importance of members feeling informed about decisions, with clear communications important at every stage of the buyout process and early planning “vital”.

Pension schemes were urged to focus on what members need to know, when they need to hear it, and what the best means of engaging was.

Hymans argued that trustees who treat communications as a strategic part of buyout, rather than a final-stage exercise, would be better placed to support members and avoid unnecessary anxiety and confusion.

“As more schemes move towards buyout there can be a tendency to focus mainly on the speed at which they can move from buy-in to buyout; with more and more looking to move quickly,” commented Hymans Robertson head of member experience for risk transfer, Donna Price.

“However, this is a significant moment for members – they are moving from a scheme, trustees and a sponsor they know to a, sometimes unknown, insurer. How it is communicated can have an impact on their confidence and understanding.”

Price added that information should provide clear reassurance about what’s changing, what’s staying the same and what decisions mean for their retirement income.

“When communications are delivered too late or without the right information or planning, trustees can face increased member queries, confusion and avoidable concern,” she continued.

“The most successful communications strategies are built around clear and simple questions.

“Planning early doesn't mean communicating early. It means understanding potential decision points in advance, building them into the buyout timetable and making sure members receive the right information, through the right channels, at the right time.

“Member communications must be viewed as a core part of endgame planning rather than a final administrative step.

“Engaging members early and providing clear, timely information throughout the transaction can help build trust and support the overall success of the transition to buyout for everyone involved.”

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