As increasing numbers of employees saving into some form of defined contribution (DC) pension (rather than defined benefits plan) reach their fifties, employers will be faced with new challenges across pensions, workforce planning, reward and the employer value proposition (EVP). Typically, these employees will have been in default investment funds and contributing in line with their employer’s rules or at the government minimum level. In other words, they have never had to make proactive decisions around their pensions during their working lives nor seek financial advice.

As they reach age 55 and beyond, however, they start to have the option to make choices and decisions – for better or for worse. With no default retirement journeys in place, they could inadvertently make choices while still working that will not only affect their finances for the rest of their lives, in the more immediate term poor choices could delay their retirement, unnecessarily increase their tax bills or lead them to buy inappropriate retirement products. This potential damage creates risk for the employer’s workforce planning strategies, internal employer brand and EVP. All the striving for good member outcomes by best practice employers can be quickly undermined, destroying ROI, unless relatively simple actions are taken by employers.

Good pre- and at-retirement choices, made at the right time can have a huge positive impact for both employees and their employer. In addition, the pensions market is working hard to develop solutions to meet the needs of the new ‘default’ generation of workers coming up for retirement.

Aviva, believes it is vital to raise awareness with employers, and to provide practical actions and solutions that employers can put in place for their over 50s and near-retirement employees. These older workers are the fastest growing cohort of employees in the UK today, so engaging them at work and in their future retirement creates an excellent EVP for organisations.