UK - Barnardo's "transparent and flexible" approach to changing its final salary scheme is being hailed as a blueprint for the industry.
The National Association of Pension Funds says the way the children’s charity put forward changes to reduce the £230m scheme’s £45m deficit should be considered as an example of best practice.
Rather than closing the scheme and switching to a less expensive defined contribution arrangement, the firm offered members six variations of the existing fund.
It devised the options – each with a different mix of accrual rates, retirement ages and contribution rates – with staff and union officials over a three-month period.
The Barnardo’s Staff Pension Scheme currently has a 1/60th accrual rate with a staff contribution rate of 6% and a normal retirement age of 65 and members now have until March next year to finalise their choice.
Pensions manager Graham Brown said: “The exercise has been hard but was made easier because we thought through the implications of the options on offer, did not try to impose a single solution for each person and ensured that everyone had the opportunity of talking through the issues.”
The firm educated staff on the changes through a nationwide roadshow, which covered 3500 miles over a four-week period, and by setting up a helpline which received more than 2000 calls and 1000 emails.
An NAPF spokesman said: “We have always advocated that companies should not jump straight from one option to another.
“It is also pleasing to see a company engaging with the pension members themselves so that it allows them to feel a part of the decision-making process.”
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