When the Royal Schools of Music pension scheme secures a £35 million buy-in, it is tempting to reach for the musical metaphors. But buy-ins and buyouts really are moments when communications need to hit the right note.
As insurer volumes continue to grow, more and more defined benefit scheme members are going to receive news that something has changed about their pension. The transaction itself may be technically complex, but the message members receive should not be.
Trustees and providers understand the mechanics. Members often do not. 76% of people already say they find pension communications difficult to understand, and when people do not understand what is happening to their pension, they call the helpline, or they worry, or both.
Here is a plain English look at what buy-ins and buyouts actually mean for members, and where the biggest communication gaps tend to appear.
A buy-in is when the trustees of a pension scheme purchase an insurance policy to cover some or all of the scheme's liabilities. The scheme itself continues to operate as before. Trustees remain responsible for paying members' pensions, while the insurer makes payments to the scheme under the terms of the policy.
Schemes typically enter into buy-ins to reduce long-term risk and provide greater certainty over meeting members' benefits. From a member's perspective, however, day-to-day life should look much the same. Their pension continues to be paid by the scheme, their usual point of contact remains unchanged, and in most cases they do not need to do anything.
The communication challenge is almost the opposite of the buyout challenge. Because little appears to change, the temptation can be to say very little. But members often hear about buy-ins through industry news, employer communications or pension forums before receiving information from their own scheme. A vague understanding that "something involving an insurer has happened" is exactly the kind of uncertainty that generates anxious calls to administrators.
A buyout is the next stage. Once completed, the insurer assumes legal responsibility for paying members' benefits directly, individual insurance policies are issued, and the pension scheme can proceed towards winding up once all its remaining obligations have been met.
For most members, the benefits they are entitled to receive remain the same. What changes is who provides those benefits and who they contact in future. That is a bigger shift than it might sound, particularly for members who have dealt with the same scheme and administrators for many years and are now being asked to place their trust in a new organisation.
One of the most common member concerns during either transaction is simply: do I need to do anything?
In the great majority of cases, the answer is no. Members' benefits move across as part of the transaction, the information needed to administer those benefits is transferred, and members will not normally need to take any action themselves. But "you don't need to do anything" is only reassuring if members believe it. A generic letter filled with unfamiliar insurance terminology rarely achieves that on its own.
Buy-ins and buyouts generate a predictable wave of member questions.
Why has this happened?
Is my pension safe?
Will anything change?
Who do I contact now?
Is this genuine, or could it be a scam?
That last question has become increasingly important. Members have spent years being warned about pension scams and unexpected communications regarding their retirement savings. Receiving a letter introducing a new insurer can understandably cause concern if it is not clearly explained. Every unnecessary enquiry reaching a call centre or administration team consumes time and resources, while uncertainty can leave members more vulnerable to criminals attempting to imitate legitimate communications.
This is where personalised communication can make a real difference.
Video Canvas from FCX Technologies is designed for exactly this kind of moment, when a scheme needs thousands of members to understand a significant but often technical change, and where a standard letter or lengthy FAQ may not be enough.
For a buy-in, a Video Canvas experience can explain, using each member's own scheme information, that the scheme continues to pay their pension, that an insurer is now supporting the scheme behind the scenes, and that they will not normally need to take any action. Because the experience adapts to each member's circumstances, it can also identify the relatively small number of people who do need to take action, without confusing everyone else with information that does not apply to them.
For a buyout, the need for clarity is even greater. A Video Canvas experience can explain what the transfer means for that individual member, introduce the insurer that will become their future point of contact, confirm what remains unchanged, and answer the questions members most commonly ask, all within their own scheme's or insurer's branding.
Built to deliver a consistent message but tailored to each member's data, Video Canvas helps schemes turn one core explanation into thousands of personalised, on-brand experiences.
Every experience also includes the recap game, inviting members to confirm their understanding through a short interactive exercise. That gives trustees and providers evidence that members understood the key messages, rather than simply demonstrating that a communication was issued.
Buy-ins and buyouts are no longer exceptional events. They are becoming an increasingly familiar part of the defined benefit landscape, and each one creates the same communication challenge: how do you make a technically complex, legally significant change feel clear, relevant and reassuring to thousands of individual members?
Personalised, data-driven communication gives schemes a repeatable way to answer that question. The same approach can be adapted for different transactions, different schemes and different providers, helping members understand what is changing, what is staying the same, and what, if anything, they need to do.
If your scheme has a buy-in or buyout on the horizon, or has recently completed one and is still handling large volumes of member enquiries, it may be worth asking whether a personalised Video Canvas experience could do the explaining, so your administration team does not have to.
If you are a pension provider, trustee or scheme administrator managing a buy-in or buyout, we would welcome the conversation. Contact the Video Canvas team at fcxtechnologies.com/contact.
"Great video content is so engaging for members, especially when it is deeply personalised to them. We chose to partner with Video Canvas, not just for great tech, but for their creativity and their strong focus on security."
Chris Connelly
Chief Strategy Officer
