BP has run a communication campaign to ensure high earners are fully aware of changes to pensions tax relief.
Addressing delegates at the Employee Benefits Pension Summit 2011 at the Four Seasons hotel in the Hampshire countryside, Susan Hughes, policy manager, UK pensions and benefits at BP, explained that as around 10% (around 1,000 employees) of the oil and gas firm’s workforce earn above average salary, clear communication was needed to let employees know of the coming changes.
At the end of 2010, BP began generic communications to all employees, as well as segmented messages to those that would be significantly affected by the changes. It also introduced an annual allowance projection tool on the intranet.
BP also ran two hour seminars over a five week period around the country, as well as telephone clinics whereby an employee could have one-on-one conversation with an independent financial adviser (IFA). It also ran a webinar to reach the firm’s expatriate population.
Hughes explained that the defined benefit (DB) plan has a core 60th accrual, and employees can select their own contributions up to a 35th, which 60% of the employees choose to do.
The energy firm has introduced three new accrual rates below the 60th of 80th, 100th and 120th.
Employees that are impacted this year by the tax changes have the option to stay with their current accrual rate, or move down to the next accrual rate that brings them within the £50,000 limit.
Read more articles from the Employee Benefits Pension Summit 2011