Nationwide Building Society is to tempt staff to contribute earlier to their pension by allowing them to top up contributions through its flexible benefits plan.
Employees, including its lowest paid staff, can choose to make contributions in multiples of £10 up to a maximum of 15% of their salary in order to boost their pension pot.
The scheme, which will be added to Nationwide’s flex package when it is renewed in November, is aimed at making it easier for staff to save.
Evan Davidge, reward consultant, said: “We have an added years pension at the moment, but it excludes employees who are not in the final salary scheme and are in what we call the career average scheme; that requires a two-year qualifying period.”
He added that the new scheme, referred to by Nationwide as its own ‘pensions credit plan’, will be open to all employees with no qualifying period.
Davidge also said that the changes are aimed at encouraging staff to start to save for retirement at an earlier age. “It’s particularly beneficial for younger generations to opt in at an early stage. So what we are doing is just creating a level playing field to try and motivate more and more of our employees to think about their future pensions.”
Allowing staff to top-up their pension through a flexible benefits scheme is a growing trend among employers. Some 14% of organisations now offer their pensions this way according to Employee Benefits Pensions Research 2003.
Clive Cripps, head of flexible benefits at consultancy firm Entegria, said: “There’s much more readiness in the market now than there was a couple of years ago to allow, if not total flexibility, at least a significant element of flexibility on what you do. You quite often get a level of flexibility on [pensions] contributions built into a flexible benefits scheme now.”
He added that this can be used to determine the total level of contribution into staff pensions. “It is a cost control measure. Within a flex programme, the employee elects what sort of money they want to pay into the pension themselves and that generates the matching [sum or other option] from the employer. The flex scheme becomes the [basis] for the contribution level selection.”
• The popularity of Nationwide’s flex scheme, meanwhile, has prompted the company to move it online from November. A bike leasing scheme has also been added.