Train and jet manufacturer Bombardier Transportation has swapped its ex-British Rail defined benefit pension scheme for a salary sacrifice arrangement through its flexible benefits plan.
Mathew Davies, head of compensation and benefits at the firm, said that it expected to save around £450,000 as a result of 90% of its 4,000-plus staff enroling in the new plan.
"We have quite a good [defined benefit] pension scheme, and nothing’s going to change there, we’re just changing how the money gets into the fund. Some of the old British Rail sections had been closed, so we opened those up again," said Davies.
Bombardier Transportation rolled out the scheme in April following a two-year review into pension provision and after deliberations with its pension advisers.
"We didn’t have the time to introduce it at first, and when we did there was a lot of pain for the gain," Davies admitted.
The company informed staff of the change in January and later included an explanation of the plan in staff pay advice.
New staff will be allowed into the scheme during an annual enrolment period.
The company’s parent office is based in Canada and staff often transfer from one office to the other, which affects pension provision. However, Davies said that almost all employees transferring from the UK to Canada retained UK rights because of the generous measures.
The plan is operating as part of its flexible benefits scheme, which includes benefits such as holiday trading, healthcare benefits and childcare options.