The Institution of Civil Engineers (ICE) closed a defined benefit (DB) pension scheme with 60 members and a trust-based defined contribution scheme with 110 members at the end of last year, and replaced them with a single group personal pension plan provided by Scottish Life. Since then, membership has risen by over 30% to 225 policyholders and the average contribution has risen from 5.6% to 7.6%, with the employer matching to 8%.
One reason for the better engagement is that all staff received one-to-one advice with adviser Secondsight, which was partly paid for by the plan’s annual charges and partly as an ongoing fee paid directly by ICE.
This was used to explain the level of contributions required to build a decent pension and asked members to put themselves into one of five risk categories, which were then matched against five lifestyle funds. One-quarter of members chose the option for automatic increases so the average employee contribution will rise to 9.2% over five years.
Ethan Kelly-Wilson, head of HR operations at ICE, says the organisation had been paying 26% of each employee’s salary into the former DB scheme. It had also been contributing an additional £1 million a year since 2008 to reduce its £2.5 million deficit.
“We have been able to fund a lot of what we have done by the £100,000 of savings closing the DB scheme created in the first year, as well as vamping up staff benefits, such as private medical cover and improved maternity and paternity benefits,” he says.
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