Since the Institute for Civil Engineers (ICE Group) closed its defined benefit (DB) pension scheme to future accrual and launched a group personal pension (GPP) scheme in 2010 it has saved £240,000 and reinvested in new benefits.
Speaking at Employee Benefits Live, Ethan Kelly-Wilson, project director, human resources, ICE Group, said that the organisation has also increased its pension scheme membership to 75%, a rise of 25%.
The organisation learnt, through an employee engagement survey, that 52% of staff felt their benefits were uncompetitive, 47% felt they were inadequate, and 34% of leavers cited salary and benefits as the key factor.
Following the survey results, ICE Group set aims to encourage its employees to think about total remuneration, increase employees’ overall value of the benefits package, increase pension scheme membership, and reduce a growing deficit.
The first step was the closure of its defined benefit (DB) pension scheme to future accrual and the winding down of a money-purchase defined contribution (DC) pension scheme.
Then ICE Group rolled out a GPP, with matching contributions by the employer up to 8%. The GPP is offered via a salary sacrifice arrangement, returning 6.9% of the employer’s national insurance (NI) contributions into employees’ pensions.
Savings of £240,000 were made as a result of switching pension providers and streamlining healthcare benefits. The organisation held pension advice sessions with new provider Secondsight.
The firm has saved an additional £80,000 using the salary sacrifice arrangement.
Results of an employee engagement survey in 2011 included:
- 100% of former DB scheme members increased the value they placed on benefits
- 91% of former DB scheme members are on target to reach their retirement goals, up from 25%
- 88% of former DC scheme members increased pension contributions
- 67% of former DC scheme members are on target for their retirement goals, up from 24%
- 62% of staff would stay at ICE Group based on the benefits package
- 94% of staff said their pension knowledge has improved
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