Pensions Funds are not famous for their brand management – indeed I suspect that few would even consider that they are brands at all. But they are – and this has important implications for how they communicate - and indeed for how they behave. Obviously a Defined Benefit Pension scheme’s brand is in most cases inextricably linked to that of its sponsor - but the sponsor’s brand is not the same as the Fund’s and it is a communications challenge is to ensure that this is understood by members. Decisions taken by the Pension Fund trustees are NOT decisions taken by its sponsor and although that important distinction may not be understood by all Fund members it really needs to be.
The main challenge is for Trustees to give their Fund a distinctive identity separate from that of their sponsor. This means that they need to emphasise that the management of the Fund, and especially changes made to it, are changes taken by Trustees not changes imposed by the sponsor. In a well-run Fund with good sponsor relations this is unlikely to be a problem. But if a Fund gets into difficulties this does become much more challenging – especially if the sponsor is pushing the Trustees hard to agree to changes to the Trust Deed that will reduce its (the sponsor’s) financial liabilities or risk. Trustees have by law to act in the interest of the Pension Fund’s members but this can lead to tensions in times of difficulty - such as when a Fund is heavily in deficit and a recovery plan is in place. In the past it was much easier for a determined sponsor to push through major changes - such as a closure of a scheme to new entrants or even the stopping of further accruals for actives.
Modern communications, including social networking, gives those opposed to Pension Fund changes the opportunity to campaign effectively. For example in the British Airways pension scheme three trustees recently resigned from their Board in protest against a proposed RPI to CPI indexation change. These three ex-trustees continue their campaign in the Pensioner interest and are active in the independent “Association of British Airways Pensioners” (ABAP) where they use brand and communications techniques skilfully to fight their case. The ABAP has a website as a communications tool and they also have professional looking video clips on YouTube and pages on Facebook. The creation of a professional looking website is straightforward and costs very little. I doubt that the very good looking ABAP website at http://www.abaponline.org/ cost much to create and run but it works well. In the modern world of communications such common interest group alliances can be built and supporters can be kept informed quickly and cheaply. The ubiquity of modern communications is such that Sponsors and Pension Fund Trustees will have extra pressures on their shoulders and fewer places to hide!
Whilst activists have modern communications tools at their disposal so of course do Trustee Boards and they certainly need to respond to these changing communications realities. If it is competently done a Pension Fund can benefit from this rapidly changing communications environment and need not feel threatened by it - but to do this they first need to accept that the old ways of doing things just won’t work anymore. All communications to members need to be well designed, non-formulaic and digestible with the key facts and issues openly presented. And the style must be such that two-way communication is encouraged. The web is ideal for this and any Fund’s website should ideally include (inter alia) a forum to which members can make a contribution if they wish. The content and visual appearance of a Fund’s website, and navigation around the site, needs to be judged in the context of Internet best practice - it should be designed not just to inform but to enhance the Pension Fund’s brand and build members’ confidence in it.
The old days of Trustee Boards being perceived unquestioningly by members as acting in their interest have gone. The new reality is that a Board’s duties include that of managing the perceptions of its members - and they should also anticipate that there could be organised and professional opposition from activists to any changes that can be presented as not being in members’ interest. In these circumstances Boards need a highly professional approach to communications and the use of all of the modern brand management tools.
Paddy Briggs is a Member Nominated Trustee of the Shell Contributory Pension Fund. He writes in a personal capacity.