TFC sets up pensions task-force

A leading finance company is so alarmed that its own 20-something staff are still utterly bamboozled by pensions that it has set up a task-force to help educate employees.

The Funding Corporation is so concerned by the situation amongst its staff that it has also written into employment contracts that it will make a decision for them: six months in to their job, they have to opt in or opt out of a pension scheme.

The challenge is explaining the concept that the cost of one night out foregone each month today, invested in a pension, could turn into enough to pay for a dream villa in Ibiza - or Bournemouth - in 40 years time, said Joss Ivory, HR Manager of TFC.

Better still, a good chunk of that cash will have come from the Government: Gordon Brown could be helping them pay for their retirement holiday home because the Government will contribute to a pension scheme.

This is not financial advice; we are educating staff - many of whom are unclear on how or why to save for their retirement.

The average age of the 500 staff at Chester-based The Funding Corporation (TFC) is 27, with vast numbers of staff in their early 20s.

People in their 20s simply donít understand the pensions issue and canít be expected to: theyíre living in a social environment in which anybody can have virtually anything whenever they want it, and they think itís going to be like that forever, said Joss Ivory.

But thereís a double compounding of the issue - they are mainly of an age whereby they have seen their parents become comfortable or well-off because of the ebbs and flows of the economy in recent years, and they think that will automatically happen to them.

On top of that, the majority of 20-somethings have short-term priorities - cars, holidays, clothes - rather than an eye on their retirement. It is our duty as a responsible employer - and I would urge other employers to do the same - to educate and guide staff down the route of pensions understanding.

Wealth or even a basic living are going to become much more elusive as people live longer, and property values and share prices donít grow as fast as they once did.

We have therefore established a task-force within the business. It runs pension seminars and briefings, circulates emails and literature about pension upsides and downsides and pushes very hard to get people to take out a pension scheme.

Our staff scheme is a fully portable personal pension arrangement, but we will match their contributions. Our senior management team is highly successful in the financial services sector, and knows how crucial it is to convince staff they should take out a pension.