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The HR Forum

Hi all - Happy Friday :)

I have recently been discussing pensions with my colleague who manages employee benefits and we are considering moving our pension scheme from a defined benefit to a salary sacrifice scheme. We understand the advantages this would bring to both the company and the employee, but I also want to make sure I look into any problems this could casue.

I am now looking into what steps I need to take to advise employees and gain their consent, as I believe it would require an update to their terms and conditions.

Has anyone been involved in this kind of change before? I would be really interested to understand the process you followed, things you considered and also what changes you made to the contracts.

 

Thanks

Leanne

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Replies

  • Hi Leanne

    It will require significant amounts of consultation, and it is worth identifying if the company will provide employees with access to a financial advisor.

    I have a Q&A document on FAQs to use with employees when moving to salary sacrifice I have your email address so will send this over to you.

    All the best

    Sarah

  • Hi Leanne

    When we set up our autoenrolment pension scheme a number of existing pension members were required to move funds to the new scheme. There was quite a large fee involved in doing this which was not communicated at the time despite meetings with an IFA. Because this fee had not been explained to the existing members the compnay was then forced to cover the cost of transfering the funds to the new scheme. This might not be applicable for your scheme but worth considering. 

     

    Kay

    • Thanks Kay. Will definitely bear this in mind.

      • As one of the affected members I wasn't very impressed as it equated to quite a large chunk of my pension at the time. The fee was an admin charge from the IFA the company had appointed. 

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