Standard Life is to increase contributions into its defined benefit (DB) and group personal pension (GPP) schemes from June, when staff make additional salary sacrifice payments through its flexible benefits plan.
The bank will add an extra 10% of the amount employees sacrifice on top of the tax and national insurance (NI) savings that they gain. Previously, staff who made salary sacrifice contributions into the GPP did not receive any extra employer funding.
Members of the firm’s closed DB scheme who make salary sacrifice contributions into its retirement account plan, will also benefit from higher employer contributions. This account allows DB members to salary sacrifice money into a Standard Life-managed account, which can be drawn on on reaching retirement. Staff can take up to 25% as a tax-free lump sum and put the rest into a pension. Employer contributions will rise from 5% of the amount which is salary sacrificed to 10%. The additional funding for both schemes will come from Standard Life’s NI savings.
Aileen Newall, compensation and benefits consultant, said: “What we’re trying to do is give people attractive tax-efficient options to help them plan for the future.”
From June, the company will also introduce new options to its flexible benefits scheme. These include discounted wine and a re-designed cycle-to-work scheme that has a minimum spend of £100.