Bethell, the independent construction, power and rail group, will introduce salary sacrifice around its group personal pension (GPP) scheme this month.
The organisation decided on the move to make cost savings. Increases in national insurance (NI) from 2011, announced at the end of last year, added to its business case. Neil Hopkins-Coman, financial director, said: “In today’s economic climate, there is tremendous pressure for employers to save on costs, and this provided an opportunity to save on employer’s NI.”
Bethell will retain the employer’s NI saving it will make, and the employee’s NI saving will be added to pension contributions. “It didn’t make sense for Bethell to bank the employee NI saving,” said Hopkins-Coman. “It was an opportunity to increase the benefits package and look after the interests of Bethell’s long-serving key people instead.”
To help employees understand the change, Bethell has issued a briefing document, and a pensions calculator so they can see the difference a switch would make. “We started to get one or two questions back, so we also issued a question-and-answer document,” said Hopkins-Coman. “One common question was whether other benefits that are linked to salary would be affected by the move, so we said we would keep a shadow salary pre-sacrifice, which all future awards and benefits will link back to.”
So far, 50% of the scheme’s members have moved over to the salary-sacrifice arrangement. Hopkins-Coman said Bethell would run a series of one-to-one education sessions with its advisers, AWD Chase De Vere Consulting, to encourage wider take-up of the scheme.