Less Guesswork and Rose-Colored Glasses in Wtp Communication with Participants

Wtp communication with participants needs to be clearer and more balanced

In a recent report on participant communication, the AFM clearly outlines its expectations. The good news is that the regulator observes progress. At the same time, there is room for further improvement. The AFM concludes that pension funds need to be clearer about the negative consequences and risks of their decisions. The clarity and accessibility of the communication must also improve.

It has been clear for some time that communication with participants is a priority for the AFM. With this report, the AFM provides clear insights into what it expects and how many pension funds meet the required standards.

Findings participant communication report AFM

The AFM’s key conclusions are:

• Negative consequences must also be communicated clearly (in a balanced way).
• Communicate each layer of information in a balanced way. This means that positive aspects should not only appear in the first layer of information, with negative aspects and risks buried in deeper layers.
• Communicate in plain language and avoid jargon.
• The rationale and consequences of important decisions must be accessible to participants.
• When information is made available, actively inform all participant groups about where to find it. References in pop-ups or general mentions in a letter are insufficient.

Recommendations

In the report, the regulator makes several recommendations regarding the decision-making and communication process. These can help pension funds focus more on participants’ interests in their decision-making and communication. Summarized, the recommendations are as follows:

• Make participant communication part of the decision-making process.
• Explicitly consider the explainability to participants in the decision-making process.
• Involve communication experts in the preparation of decision-making and let advisory stakeholders, such as the accountability body and key function holders, also advise on participant communication.

Our opinion

While the report is balanced and describes both positive outcomes and areas for improvement, it is clear that a number of pension funds still have considerable steps to take. This report also underscores the importance the regulator places on communication that is understandable and provides participants with complete insights into the backgrounds of decisions, including both the benefits and drawbacks.

Previous guidance on communication plans has shown that good segmentation of participant groups can positively contribute to several points highlighted in this report. The findings are representative of the challenges that participant communication entails.

In our opinion, these findings emphasize the importance of a well-thought-out communication plan. Having a clear communication plan and process in place on time can positively contribute to participants’ information positions and enables the pension fund to be accountable for its choices.

Need help?

The communication by pension funds faces high demands from the regulator. It is not only important to communicate correctly and clearly; the regulator also expects this to be balanced and timely. We can assist you in this, for example, by reviewing existing materials or drafting or reviewing the communication plan.