With about a third of its 90,000-strong UK workforce approaching retirement, workforce management specialist Kate Kay believes it's safe to say BT has an ageing workforce.
With the help of Wealth at Work, the multinational telecommunications firm began running retirement planning seminars in 2009 as a result of the removal of the fixed retirement age which later led to the abolition of the default retirement age (DRA) in 2011.
As updates were also being made to the BT pension scheme, Kay explains that the company felt employees needed to have a more holistic understanding of retirement.
“It was no longer that staff were working towards a set age and prior to that, I think, people just carried on and the money was deducted from their salary so they didn’t really have to do anything – it was all done for them,” she says.
“Previously, they knew they were going to get to age 60 to 65 and they were going to retire, then of course the removal of the DRA changed everything for people and it made it open. As a company, we recognised our responsibility and our duty of care to convey to people what this meant for them in practice.”
BT currently runs three-hour face-to-face seminars for members of its final salary scheme in two formats; one for people who are thinking of retiring within the next three years and another for those considering retirement in the longer term.
And while the seminars link in with the company’s pension scheme, looking at how large employees’ pensions are likely to be, the scope of education is much wider in looking at how BT’s workforce can improve their retirement benefits more generally, through investment of savings and tax efficiency, for example.
Seminars also offer support on how to make a will and information about savings devices such as ISAs, which ensure programmes are as wide as possible to ensure members have “a happy retirement”, according to Kay.
In order to measure success, participants are asked to rank their knowledge of subjects before and after each seminar on a one-to-five scale, with one being very poor and five very strong.
With the most recent set of results demonstrating that employees’ knowledge of the subject presented increased by an average of two points – up from 2.4 to 4.4 – it appears that BT has a strong business case to extend the education programmes to its defined contribution (DC) members.
Kay says that widening the seminars to educate DC members is something that the organisation is currently considering: “Many people have come to us and said, ‘Well, what about me? I’m in the DC pension scheme and I’d like to go to a seminar as well.’”
She adds that this could also help address any concerns the firm has about employee contribution levels.
“Where we have an issue there is that we know most people just contribute the default when they join the company and it really is questionable whether that will be enough for them to have the lifestyle they have while they’re working at BT when they retire. So that’s one of the reasons we want to run the seminars, to bring it to life for people more and to really explain the difference.”
Pension scheme members who choose to attend the retirement seminars also have the option to follow up on this with a one-to-one with a Wealth at Work adviser to talk about their personal situation in more depth.
Kay explains that, with crucial legal differences between offering advice and guidance which prevent employers from directly providing the former, seminars give a good context to the “bigger picture”.
“One of the challenges within the business that line managers and HR managers have is that many employees don’t understand why they can’t talk about or help them with the BT pension scheme,” she says.
“And we can’t because we’re not financial advisers and we don’t want to say the wrong thing or interpret the figures incorrectly. A lot of people really just do want to know how much money they will get if they retire next year. It’s obviously not a simple question with a simple answer but they want it to be as simple as possible, so having Wealth at Work take them through it really helps.”
Should participants of seminars choose to tell their line manager that they are preparing to retire, this helps BT prepare its workforce in order to recognise where it needs to replace people or transfer skills, says Kay.
“It also helps us encourage people to stay as well, so it’s really useful to help us plan what’s happening with our people going forward,” she continues.
“We do have a genuine duty of care to our people. Because we’re a company that’s been around so long and we’ve got people who’ve worked for us all their lives and their family work for BT. So although it’s such a big company, it’s not a faceless company and it has real family ties.”
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