ITV is carrying out an enhanced transfer value (ETV) exercise for its defined benefit (DB) pension scheme.
It has made the non-cash ETV offer to 1,500 scheme members and expects to receive a good level of take up, said Christine Jackson, head of pensions at ITV, speaking the National Association of Pension Funds annual conference.
The move, which is intended to help the broadcaster reduce and manage its DB liabilities, follows a pensions increase exchange (Pie) exercise which it carried out last year. Pie works by offering members the opportunity to exchange an increasing pension for a higher non-increasing pension pot.
It made this offer to 11,700 of its scheme pensioners and dependants who were currently receiving pension payments. “We did not offer cash,” explained Jackson. “It was very much [them] staying in the scheme and sharing the savings from actuarial calculations 60/40.”
Scheme members who took up the offer received 60% of these, while the company retained 40%.
Overall, 4,900 of eligible members took up the offer, which resulted in 42% take up. This was higher than ITV’s anticipated 30% take up, said Jackson.
She added that communication was vital to the Pie’s success. In order to tailor initial communications various age demographics, ITV issued around 26 versions of its initial offer letter. “Clear communications that are specific and personal to members makes a huge difference,” said Jackson. “If you are 62, you do not really care what the pensions increase is for someone who is 85.”
ITV also set up an offer helpline and issued mid-exercise communications with answers to commonly asked questions.
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