Nationwide Building Society has shelved plans to cap employee benefits for older workers after a review concluded that the cost of provision did not yet outweigh the value of the package to employees.
The internal review, which was led by HR director Robert Aldrich and an external law firm, was triggered by a rise in the cost of private medical insurance (PMI) claims being paid out over the last few years by the organisation’s healthcare trust, which is managed by Cigna HealthCare.
Aldrich says: “At the moment, we have the overall view that we want to treat everyone the same. Because of our inclusive approach, we really want to hold PMI open and be seen to be a very inclusive employer.”
The organisation also considered capping pension contributions to its defined contribution (DC) group personal pension scheme as part of the review.
Nationwide employees contribute 4% of salary to the scheme, which was launched by Friends Life in 2007 and has 6,500 active members. The organisation contributes 5% for employees with less than two years’ service and 9% for longer-serving staff.
Aldrich says: “We are not considering a cap on our pension arrangements at this time. Currently, members of our pension schemes can continue to make contributions and accrue benefi ts until age 75. This is in line with current legislation.”
Nationwide has 16,800 employees, of whom about 2,000 are aged 50 and above, 300 are aged 60 and above, and 10 are aged 70 and above. About 60% of its older staff work part-time or reduced hours across departments including treasury, planning, marketing, customer services and branches. About 60% of employees join the organisation aged 60 years and above.
In addition to PMI, which is available to all staff through Nationwide’s flexible benefits scheme and is fully funded for about 2,500 managers, its flex package also includes dental healthcare, the ability to sell up to two weeks’ holiday a year, childcare vouchers, retail vouchers, health assessments, and death-in-service worth four-times salary.
The organisation will continue to monitor the cost of benefits provision for older workers to assess the viability of retaining it for all employees.
Aldrich says: “If, in years to come, we found we had a considerable number of people who wanted to stay and we had a large group of people, say, aged over 75, and that disproportionately really hit the rest of the benefits scheme, [for example] the cost of that was 20-times other people’s, I guess we would have to look at it and say ‘can we afford to do it?’ and therefore maybe put more age caps on things. But currently we don’t have sufficient [numbers of older workers], so the issues haven’t arisen to say that we lose the benefit.”