Keeping in Step

www.employeebenefits.co.uk May 2014 I £6.95

ALIGNING REWARD WITH BUSINESS STRATEGY

KEEPING IN STEP The role beneﬁ ts can play in an employer’s CSR footprint Growing appetite Switched on Health and wellbeing Mobile technology Fujitsu connects staff supplement moves up agenda for needs to business Data helps employers delivery of perks performance build workforce proﬁ le

EBC_0514 1 15/04/2014 17:12 noweVouchers available to order online

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Corporate eyecare is an important employee benefit, as well as a legal responsibility. So it shouldn’t surprise you that in a recent survey, the majority of employees considered it a valuable addition to their benefits package. With the brand new online vouchers from Specsavers, we believe the best value corporate eyecare scheme is now the easiest too. They still start from just £17 for a full eye test, a pair of VDU glasses (if required specifically and solely for VDU use) worth up to £45, and retinal screening for the over-40s or when recommended by your optometrist. But now you can simply order and pay for eVouchers online and email them direct to your staff, saving you all time and paperwork. What’s more, you’ll automatically get detailed feedback on whoever’s redeemed an eVoucher, such as their retest dates and VDU requirements, at no extra charge. Not only that but your staff can still save £20 on their own glasses purchases, too.

To ﬁnd out more, call 0115 933 0800, email [email protected] or visit us at specsavers.co.uk/corporate

EB_0105 2 31/03/2014 15:45 @ www.employeebeneﬁ ts.co.uk CONTENTS

IN THIS ISSUE LEADER

Briefi ng 4 Compliance 7 Events 9 True CSR is refl ected in Employee Benefi ts Awards 10 Interactive 12 how staff are treated Pensions in numbers 15 The big question 16 Up close and personal 19 Everyone has their own way to check whether what organisations say Sarah Purnell of Tesco about themselves holds true. For example, any corporate entity can paint Pensions 20 itself green and say it is environmentally friendly. But if its actions do not Guidance for DC scheme governance match its words, it will soon be found out. Probably by its own staff fi rst. So any organisation that says corporate social responsibility (CSR) is important to it will be Pensions 22 aware that it needs to be holistic in its CSR values. Payroll providers struggle with auto-enrolment There is a saying among reward professionals: “If you want to see what a company really thinks Cars 25 of its staff, look at how it rewards them.” Using that in a CSR context, you could say: “If you want Summer driving tips for the UK and abroad to see what a company thinks of its CSR policies, look at how it relates them to its own staff.” Healthcare 26 Where is the CSR thinking when the CEO earns a massive bonus, yet staff are on below- Dental perks can reduce time off work infl ation pay rises? Where is the CSR thinking when staff are put under pressure to produce Shares 29 more, with no robust training and coaching to build their mental and physical resilience? The tax implications of share scheme payouts We look into all these issues in this month’s cover story (see Footprint Where is the Cover story 30 of responsibility, page 32). Corporate social responsibility In recent years, the government has shifted more responsibility for CSR thinking in its many guises is a vital part of looking after the nation’s pensions savings on to employers. Similar when the CEO employers’ business strategies moves are afoot as regards healthcare and preventing staff going on earns a massive long-term sick leave. So employers’ actions in these areas, too, are Group risk 35 coming under the CSR umbrella, with employers strong on CSR, but bonus, yet How to manage people-related risk not picking up this ball in the face of potential criticism. staff are on Communication 38 For now, the biggest issue is how employers react to the fact that below-infl ation Using mobile technology to access benefi ts the primary source of information on fi nancial wellbeing and pay rises? International 44 retirement savings is the workplace. Auto-enrolment might have been How to implement a global benefi ts audit a convoluted tick-box exercise for vast hordes of organisations, but the reality is that everyone Employer profi le 46 needs to be saving far more than the measly contribution levels the legislation currently asks for. Fujitsu meets staff needs to boost business No one feels they can afford to save more. But the very least employers can do is constantly Buyer’s guides 49 inform staff of the need to save at a higher level. At least then they would be aware of the fact, I Off-the-shelf voluntary benefi ts instead of being oblivious. This would be socially responsible. And years before retirement, take I Contract-based DC pension schemes the trouble to inform staff of the options that will become available them. The myriad choices now available make uninformed staff more vulnerable to making the wrong decisions. Contact directory 53 If organisations see CSR as important, does this extend to the fi nancial wellbeing of their staff? Key service providers Debi O’Donovan, Editor Confessions 54 Follow on Twitter @DebiODonovan

Supplement: The Benefi ts Book 2014 Editor Debi O’Donovan [email protected] Deputy editor Debbie Lovewell-Tuck Social media [email protected] Associate editor Clare Bettelley clare.bettelley@centaur. (including The Benefi ts co.uk Features editor Tynan Barton [email protected] Senior reporter Jennifer Research 2014) Paterson [email protected] Reporter Robert Crawford robert.crawford@centaur. co.uk Art editor Mark Richardson, [email protected] Sub editor Bob Wells Follow us on Twitter.com for Contributors Sam Barrett, Ceri Jones, Nick Martindale Business development managers breaking news: Lisa-Jane Parker [email protected], Nikita Wolski [email protected] Event twitter.com/employeebenefi t director Juliette Losardo [email protected] Account manager Richard York richard. [email protected] Event manager Lyndsey Urquhart Publishing director, Employee Supplement: Benefi ts Phil Hayne [email protected] Offi ce manager/PA to director Alice Gerard-Pearse [email protected] Head of audience marketing Steph Boukhari Like us on Facebook: Look for our Health and wellbeing [email protected] Group production manager Wendy Goodbun eb.production@ ‘Employee Benefi ts’ page centaur.co.uk Cover photo Jacko

Employee Benefi ts Subscriptions 020 7292 3719 Wells Point, 79 Wells Street, London W1T 3QN Editorial queries/press releases email Join our Linkedin group by Tel 020 7970 4000 [email protected] searching EmployeeBenefi ts Fax 020 7943 8094 Web www.employeebenefi ts.co.uk

www.employeebeneﬁ ts.co.uk I May 2014 I 3

EB_0514 03 15/04/2014 16:47 BRIEFING

FINANCIAL EDUCATION THE MONTH IN NUMBERS Who will be responsible for 67% The percentage of respondents concerned about the potential providing fi nancial education? complexities and administrative burden of the government’s incoming shared parental leave Jennifer Paterson system, according to research by Key statistics Norton Rose Fulbright. Measures announced in the 2014 bit.ly/QcDS4H Budget give defi ned contribution 77% believe fi nancial education in (DC) pension scheme members the workplace is helping staff achieve better fi nancial outcomes. 1,400 greater fl exibility at retirement. The The number of Mazars Employee government’s changes also included 55% of fi nancial education plans Benefi ts staff who have access to a call to employers and the pensions cover only employee benefi ts and its new discounts scheme. industry to ensure staff are do not offer wider support. bit.ly/1iCZ7on educated about their retirement 76% of respondents that have options going forward. implemented fi nancial education The government announced that, “The Budget only focused on are unsure of the actual cost. 35% from April 2015, it will guarantee at-retirement education, which our The percentage of respondents Source: Employee fi nancial education study, free, impartial, face-to-face advice research tells us is decades too late, that have been through pensions published by Nudge in April 2014. for all employees that retire in DC so it is anticipated that most auto-enrolment and would have 83% of respondents consider pension schemes. employers will include fi nancial approached their preparations professional retirement planning But there is much discussion in education in their benefi ts package differently if they were to do the education a critical need for staff. task again, according to research the industry about whether this throughout the employee lifecycle.” by Irwin Mitchell. responsibility will fall to employers, Nudge’s Employee fi nancial 14% of respondents are aware of bit.ly/1lqh4sZ fi nancial education and pension education study 2014, published in various retirement income options. providers, or the government. April, found 77% of respondents Source: Generating income in retirement, published by Wealth at Work in March 2014. Tim Perkins, a director at fi nancial believe fi nancial education in the 11 million education provider Nudge Global, workplace is helping employees to The number of UK employees that said: “The £20 million pledged by the achieve better fi nancial outcomes. Financial education also plays a were protected by group risk government for fi nancial education “Financial education is more than key role in ensuring staff are aware insurance at the end of 2013, won’t even touch the sides. Looking just another employee benefi t,” said of their options at retirement. according to research by Swiss Re. to auto-enrolment as a precedent, Perkins. “It is the right thing to do, But Wealth at Work’s Generating bit.ly/1hp4o5x we expect employers to pick up the and is also contributing signifi cantly income in retirement 2013 research, logistical responsibility and cost. to the employer’s bottom line.” published in March, found 65% of 55 employers believe their staff do not The age Fujitsu employees must BlackRock rebrands fi nancial education in US understand what to expect from reach to take advantage of its new their pension scheme at retirement. fl exible retirement policy. Asset management fi rm own fi nancial wellness.” Fortunately, 83% of respondents bit.ly/1evUE4x BlackRock has BlackRock decided consider retirement planning rebranded and to rebrand its fi nancial education a critical need for staff. 8,000 relaunched its fi nancial education programme A new national professional body, The number of employees with education programme while rebranding the the Life Planning Association, was access to Telefonica UK’s new for 5,500 UK staff. fi nancial products it launched in March to tackle the occupational health service. Speaking at offered customers. It challenges of an ageing population. bit.ly/QcEQhd Employee Benefi ts categorised fi nancial Its director and secretary, Wladek Connect in New York on 25 March, wellness into three categories: Koch, said employers offer the best Katie Nedl, global head of benefi ts at retirement, which includes its route to educating staff about their BlackRock, said: “Globally, retirement pension plan; personal investment, 63% savings and retirement options. The percentage of respondents benefi ts are a theme employees rely which includes its own products, “Good practice and the increasing who would welcome help and on their employers to provide. such as staff stock options and presence of fl exible and voluntary advice from their employer on how “We are entering a new world of college savings plans; and fi nancial benefi ts point to a better and more to improve their health and responsibility, which is making sure protection, which includes group risk wellbeing, according to research by we are providing the right tools and benefi ts such as life insurance. rounded approach,” he said. MetLife Employee Benefi ts. resources to enable, engage and The organisation also rebranded @ Read a longer version of this story bit.ly/1nbDAGu educate employees to achieve their its resources and communications. at bit.ly/1kXe0Ys Thinkstock

4 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 4 15/04/2014 17:01 BRIEFING

RESEARCH Employers aim to improve engagement

Jennifer Paterson As the jobs market and war for recession on people’s mental health talent pick up, this could also be and stress levels, so it’s good we’re The desire to improve employee driving other key trends in benefi ts. seeing EAPs come up so highly.” engagement is the top issue The Benefi ts Research 2014 also In the year ahead, 67% of shaping employers’ benefi ts found that nearly half (44%) of respondents plan to increase strategies in 2014, according respondents had introduced a new communications to boost employee to exclusive research by benefi t in the past 12 months. Kim understanding of benefi ts, whereas Employee Benefi ts. Honess, head of fl exible benefi ts at 48% did so in the past 12 months. The Benefi ts Research 2014, Mercer, said: “I was quite surprised Honess said: “It seems the conducted in March 2014 among by that, but I guess that’s refl ected business world has taken on board 256 respondents, found this was in the fact that the recession is the fact that the market is picking the case for just under three- coming to an end and organisations up again and employers are quarters (72%) of respondents. are paying more attention to their refreshing the benefi ts they offer Engagement has topped the list for much wider activity beyond employee value proposition.” and the way they communicate.” of issues shaping respondents’ benefi ts, putting benefi ts into [the It is little surprise that the top But Hyland would like to see this benefi ts strategies since 2011, when context of] total reward or employer core benefi t, provided by 89% of fi gure much closer to 100%. “I am 71% of respondents said this was branding, rather than focusing on respondents, is a pension scheme, surprised that more employers are the case, followed by 73% in 2012 the benefi ts space on its own. especially in view of auto- not thinking about increasing and 74% in 2013. “Employers recognise the fact enrolment. Employee assistance communications,” he said. Stuart Hyland, business leader, that we are entering a new phase in programmes (EAPs) or counselling “I’m hoping that the numbers reward solutions consulting at Hay the recruitment market. It is a are the second top core benefi t, here are not an indication that Group, said: “Citing engagement as candidate’s market. Benefi ts and provided by 80% of respondents. employers are feeling complacent.” the main issue is good, but I hope total reward strategies have a key Hyland added: “There has been @ employers are doing more behind role in helping employers prevent plenty written in the last few years Read The Benefi ts Research 2014 at bit.ly/1jXefQb the scenes to target engagement the loss of key individuals.” about the impact of working in a

PEOPLE MOVES

Gambles sent to Coventry Alliance Boots, and head of years at Sapient, recently as analysis and implementation offi cer. Jones’ other previous Coventry Building reward and group pensions European compensation and manager, HR business roles in the industry include Society has manager at Novar. benefi ts lead. programme manager and HR HR administrator and appointed Teggart’s previous roles business partner. training administrator at Stephen Gambles D’Ash to City and Guilds include manager, Walkers Snack Foods. senior reward manager. City and Guilds international compensation Shire promotes Fenwick For the past three years, has appointed and benefi ts at Sony Shire Cooper dons Red Hat he has been senior reward Ricky D’Ash group Pictures Entertainment, Pharmaceuticals Red Hat has appointed manager – benefi ts, reward manager. compensation and benefi ts has promoted Lyndsay Cooper Europe, pensions and executive His previous role was head analyst at the BBC, and HR Jane Fenwick to Middle East and Africa remuneration at Santander. of compensation and co-ordinator at Vue head of employee benefi ts. (EMEA) benefi ts specialist. benefi ts at Equity Insurance Entertainment. She had been interim head She was previously senior Davidson joins TalkTalk Group. Other previous roles of global benefi ts since July reward analyst, EMEA, at TalkTalk has in the industry include global Beeby at Densu Aegis 2013. Before that, she was United Health Group. appointed Jenny rewards consultant at Densu Aegis associate director, total Davidson interim Unisys, reward consultant at Network has rewards at Shire. Jellicoe joins Samsung head of reward. Prudential, and benefi ts/ appointed Richard Samsung C&T has She will cover pay and reward consultant at Beeby head of Wolseley appoints Jones appointed Colin benefi ts strategy and Barclays Bank. reward. He previously spent Wolseley UK has Jellicoe general implementation, including nearly three years as group appointed manager of HR. executive compensation. Misys appoints Teggart reward manager at Britvic Christina Jones He joins the organisation Her previous roles include Misys has Soft Drinks. reward specialist. from Vinci Construction UK, director of compensation appointed Anne Before that, Beeby Since January 2010, she has where he had worked since and benefi ts, Europe, Middle Teggart principal worked at Comet Group in worked in a range of roles at 1993. His most recent role East and Africa at CSC, reward partner. various roles, including group Pepsico, most recently as was HR and employee pensions consultant at She previously spent four reward manager, reward compensation and benefi ts relations director.

www.employeebeneﬁ ts.co.uk I May 2014 I 5

EB_0514 5 16/04/2014 12:47

EB_0514 56 16/04/2014 12:17 @ www.employeebeneﬁ ts.co.uk/compliance TAX AND LEGISLATION

The latest information on legislation and tax issues affecting employee beneﬁ ts, including the government’s pension charges cap, DC pension governance and prospective changes to the private healthcare market

PENSIONS ADVICE FROM THE EXPERTS

Pension charges cap could Thibault Jeakings is a pensions lawyer at CMS Cameron see low-level charges rise McKenna

Robert Crawford in mind. With the cap in place, employers might be satisfi ed with a charge if it is at, or just Pension governance to The government’s pension charges cap could below, the 0.75%, without applying pressure to push up currently low charges where these are get closer to the 0.5% level.” beef up DC schemes available for employees in Three categories of charge are being workplace pension schemes. banned: sales commissions that are deducted The Department for Work and Pensions’ Some scheme members from members’ pensions; charge hikes when (DWP) recent publication of its plans for currently benefi t from annual individuals quit an employer but leave money improving workplace pensions has brought management charges (AMCs) well in its pension scheme; and consultancy welcome clarity to the market, but also the below the 0.75% cap that will be charges, whereby members pay for pension prospect of further regulation. imposed on auto-enrolment advice given to their employer. As well as beefi ng up defi ned schemes from April 2015. There are fears that the charges cap could contribution (DC) schemes’ governance, the Marcus Fink, a partner at law also stifl e innovation and creativity in some proposals clamp down on the costs of auto- fi rm Ashurst, said: “The 0.75% cap aspects of pension scheme design that could enrolment schemes, with a 0.75% cap on is a safe fi gure. I think it possibly lead to better retirement outcomes for staff. administration charges and a ban on could have come down lower, but not by much.” Georgina Stewart, director of business additional charges for deferred members Towers Watson’s FTSE 350 DC pension survey development at law fi rm Sackers, said: “The cap and commission payments. 2014, published in April, found that the average may discourage innovation in default options. Although no doubt benefi cial to scheme AMC for FTSE 350 pension plans is 0.41%. Some schemes have been developing more members, the new rules will not take the Alan Morahan, head of defi ned contribution sophisticated defaults with higher charges in the size of schemes into account. This will be of consulting at Punter Southall, said: “The market belief that they will deliver a better outcome for concern to small and medium-sized may shift and new scheme terms will be members. The cap is a shame for plans like these.” employers with their own trust-based benchmarked against the higher level of 0.75%. plans, which they might be forced to close because of the administrative burden. “I am concerned that it could actually result in @ Read also Pension charges cap could stifl e Larger employers may also have an increase in charges in newly established industry at: bit.ly/1hRrM6T schemes. The market is operating with a 0.5% cap concerns about the charges cap and banning of commission. HEALTHCARE Those with schemes that charge more than 0.75% may need to incur the cost of renegotiation or even change scheme Healthcare changes could cut PMI costs providers. The ban on commission will mean that employers will have to either Forthcoming changes to the healthcare consultant at Towers direct business to their hospitals, pay for advice or do without it. private healthcare market could Watson, said: “We expect the which will increase competition. Employers may also fi nd the charges lead to lower private medical changes to stimulate further The report also found a lack of cap results in them having to pay for insurance (PMI) premiums and new developments in new product publicly available performance middleware services, such as payroll product design. design, particularly in areas such information about private integration, that were previously free. The Competition and Markets as alternative delivery models and healthcare services offered by But there is good news for employers. Authority’s (CMA) Private direct contracting with physician private hospital operators. The proposals include requirements for healthcare market investigation groups. Ultimately, the changes Operators will now be required to greater transparency and standardised fi nal report, published in April, could act as a catalyst for the UK provide clarity on costs and the comparisons of charges, which will make it announced measures to address a market to evolve.” quality of treatment. easier for employers to compare providers lack of competition and consumer The CMA’s measures will crack and see if they are getting a good deal. @ detriment issues in the market. down on hospital operators Read a longer version of this story at bit.ly/OeUkA2 @ To read more advice from tax and legal experts, Joanne Anderson, senior offering consultants incentives to go to: bit.ly/RYrvb6

www.employeebeneﬁ ts.co.uk I May 2014 I 7

EB_0514 7 15/04/2014 16:58 ADVERTISEMENT FEATURE Co-operating to bring benefi ts to a wider UK workforce Debbie Tankard, national sales and marketing manager at Co-operative Flexible Benefi ts, explores the accessibility of benefi ts to employees and why staff should be encouraged to take advantage of the schemes available to them

updated. And this is where our new Benefi ts Plus system comes in. Delivered by Co-operative Flexible Benefi ts, part of The Midcounties Cooperative, the online software solution enables management teams to share the benefi ts they offer with their staff, alongside internal news announcements and team updates, details of pension schemes, and simple facilities to record holiday bookings and sickness logs. The portal can be specially designed to refl ect a business’s The most important aspect of any branding so it is instantly recognis- successful business is its employ- able and relatable to staff, an ees, and businesses that have a important aspect to encourage use more engaged and enthusiastic and to give an identity to the service. workforce are often those which The software has been built in such have initiatives and benefi ts in place a way that it can be accessed on any to support their staff both at work type of computer, tablet or mobile and at home. device, meaning users can log-in Introducing a selection of whether they are in the offi ce, on a benefi ts can help boost morale train or at home with their family, to among staff, which can in turn lead fi nd out more about the savings they to reduced employee turnover. This are making. results in an additional benefi t for One benefi t that many employees the business as it reduces recruit- often choose to introduce for their ment and training costs, and employees is Payroll Giving. This schemes, it encourages people to career aspirations while ensuring generates an experienced team to fl exible scheme allows anyone who make donations when they may their young children receive quality “With an increasingly online work alongside and help develop pays UK income tax to give both otherwise have been reluctant to. childcare. workforce, the most effi cient newcomers joining the business. one-off and regular donations on a By establishing a relationship with Working parents benefi t the local way to communicate a A regularly voiced concern from tax-free basis to charities and good employers, charities may also fi nd economy and allow children to enjoy benefi ts package and its some business owners is they causes of their choice. this results in additional charitable a broader social environment from feel their operation is too small to What makes our Co-operative support, perhaps in the form of vol- a young age, which can only lead to advantages to employees is warrant having a benefi ts package Payroll Giving service a unique unteering hours or wider fundraising the sustainable development of our through an online portal” in place, but whether the company addition to a benefi ts package is initiatives and sponsorship events. local communities. It is essential that is a family-run delivery fi rm with a that it is free to use for the employer, One essential employee benefi t affordable childcare is delivered to few employees or a multinational employee and also the charity. We that generates emotive debate is working parents in an effi cient and “our” nurseries, parents will auto- conglomerate with offi ces across the ensure that the nominated char- childcare vouchers, and particularly simple manner, and soon. matically qualify for further discounts globe, the same benefi ts are avail- ity receives the entire donation by discussion around the government’s Co-operative Flexible Benefi ts on their childcare costs. able to them regardless of their size. “ring-fencing” the money, so it is proposed £750-million Tax-Free is proposing amendments to the As a co-operative, providing There are a number of different not used as working capital and is Childcare investment. Co-operative current childcare vouchers system support and cost-saving solutions to benefi ts that employers can offer to passed to the charity within seven Flexible Benefi ts, a leading childcare so that the salary in-put limit is businesses and their employees is a their employees to help them both days of receipt. voucher provider, is an avid sup- increased, the scheme becomes fundamental part of our core values, save money and feel happier in their This free service forms part of porter of the proposition, but has available to self-employed parents and as a large proportion of our profi ts jobs, such as childcare vouchers, The Midcounties Co-operative’s strongly recommended changes to and it is a mandatory requirement are ploughed back into our busi- family-care advice and legal services. core values and social responsibil- the current voucher system to make for employers to offer the benefi t, so nesses, including Cooperative Flexible However, what can often hinder take ity commitment to support its local affordable childcare immediately ac- affordable childcare is available to Benefi ts, we are constantly looking up of the benefi ts available is lack communities, and by absorbing all cessible for working parents, rather working parents sooner than 2015. to innovate and improve the range of awareness among staff that they administrative costs associated with than in the government’s 2015 Our childcare vouchers can be of benefi ts we offer and the delivery are in place, what they mean and the the scheme, we ensure the charities timeframe. used at any one of the Co-operative tools used to communicate them. cost-savings they generate. receive the maximum benefi t of the The high cost of childcare is a Childcare’s 51 nurseries located It is important businesses We recognised that, with an donations made. signifi cant fi nancial challenge for nationwide, where an emphasis is know that, regardless of their size, increasingly online workforce, the Payroll giving is an important many parents, often preventing placed on learning through play in a employee base or the industry they most effi cient way to communicate a fundraising tool for charities as it women from returning to work. The stimulating environment, as well as at operate in, the benefi ts packages benefi ts package and its advantages generates a regular and reliable Tax-Free Childcare scheme will give any other Ofsted-registered provision. are simple to introduce, and can go to employees would be through an income for their activity, and with all parents equal opportunities and By using our childcare vouchers to a long way to improving employee online portal, which can be regularly the tax relief provided through these a greater chance to achieve their pay or part-pay their nursery fees at retention, morale and engagement.

For more information on the sch emes that Co-operative Flexible Benefi ts off er Call 0800 458 7929. Visit fl exiblebenefi ts.coop and use the live ch at facility E-mail info@fl exiblebenefi ts.coop

EB_0514 8 28/04/2014 15:25 EVENTS

Top names in the industry will present at this month’s Employee Benefi ts Summit and Employee Benefi ts Live in September after Employee Benefi ts Connect hit the US in March Tesco and Finmeccanica to speak at Summit

Top-level compensation and benefi ts Speakers include Sarah Purnell, head In recent years, both of these managers will gather at the ninth annual of UK reward and benefi ts at Tesco, and organisations have won Employee Benefi ts Employee Benefi ts Summit, which takes Martin Flavell, human resources director Awards for their benefi ts strategies. They place in Spain this month. at Finmeccanica. will have the opportunity to discuss the latest trends and upcoming challenges affecting employers and employees, and the role reward and benefi ts can play. Purnell will speak on ‘The outlook for reward and benefi ts as the economy improves’, and Flavell will discuss the increasingly crucial issue of ‘Defi ned contribution pension default investments: meeting the needs of members’. In addition, leading experts will run small interactive workshops for all delegates. These will cover benefi ts communication, fi nancial wellbeing, benefi ts technology, pre-retirement education and salary sacrifi ce cars. Find out more about the Employee Benefi ts Summit 2014 at: www.employeebenefi tssummit.co.uk

Employee Beneﬁ ts Connect is a hit in the US Live event marks 16th year

The fi rst Employee Benefi ts Connect Employee Benefi ts Live, took place in New York on 25 March. Europe’s largest dedicated Speakers from Hallmark Cards, reward and benefi ts Loews Corporation and BlackRock event, will return for its presented case studies during the 16th year on 24 and 25 day-long conference. September 2014. The event programme won praise Taking place at from delegates. Olympia, London, Mary Beth Giroux, senior benefi ts Employee Benefi ts Live network, share ideas and administrator at Coach, said: “All the offers an extensive best practice, benchmark information was very helpful, and it editorial-driven suppliers, source the was very thought-provoking. conference programme latest solutions and learn There was a lot of information and exhibition. new techniques to help that I took away from it, a very The event provides a them attract and retain large learning curve. I am so Next year’s platform for the best talent. glad I went. I really enjoyed it conference will take compensation, benefi ts For more information, visit and I cannot wait for Employee place in New York and HR professionals to www.employeebenefi tslive. Benefi ts Connect 2015.” on 16 June 2015. come together and co.uk

@www.employeebeneﬁ ts.co.uk/events

www.employeebeneﬁ ts.co.uk I May 2014 I 9

EB_0514 9 15/04/2014 15:35 AWARDS

Get set for the Awards extravaganza Final preparations are under way for the Employee Beneﬁ ts Awards 2014 and summer garden party, which take place on Friday 27 June

The Employee Benefi ts Awards 2014 and summer garden party will take place at The Royal Artillery Garden at the HAC, London, on Friday 27 June. As well as fi nding out which organisations have won this year’s coveted trophies, the high-profi le Top views of event also provides the the Awards ideal opportunity to “The Employee network and celebrate Benefi ts Awards are with, as well as learn from, the pinnacle of our industry leaders in a industry, and it is relaxed environment. always interesting to And let’s not forget that hear about what the this is the ideal opportunity best employers are to have some fun and doing to continue to celebrate all your hard push the benefi ts work and achievements engagement agenda.” over the past year at the John Whitaker, summer garden party that BSkyB follows the awards ceremony – which “The awards are a includes a funfair. great opportunity for employers to G See which organisations showcase the benefi ts have been shortlisted they offer their staff for Employee Benefi ts and, perhaps more Awards 2014 at www. importantly, gain insight into what other employeebenefi tsawards. organisations offer.” co.uk/shortlist Brian Cunningham, BMW

Employee Benefi ts Professional of the Year shortlist “Congratulations on a great event. We are This year’s Employee Benefi ts This year’s shortlist is: reward and HR services, City delighted to be part of G Professional of the Year will be chosen Paul Bissell, head of reward and Guilds it as a key sponsor and G by members of the Employee Benefi ts (fi xed line), Vodafone Raffaela Goodby, head of look forward to joining 100 Club from nominations made by G Neal Blackshire, benefi ts and organisational development, you again next year. readers of Employee Benefi ts and users compensation manager, engagement and wellbeing, Congratulations to the of www.employeebenefi ts.co.uk. McDonald’s Restaurants Birmingham City Council team for putting on Previous winners include Janine G Adam Brooke, vice-president, G Ian Hodson, reward and benefi ts such a super event.” Sparks, head of reward and performance employee benefi ts (UK), manager, University of Lincoln David Walker, at Southern Water, and Debra Corey, JP Morgan G Seth Russell, director of reward, Personal Group group rewards director at PageGroup. G Chris Coyne, group head of Three UK

For more information and to book your place at the Awards, visit www.employeebeneﬁ tsawards.co.uk

10 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 10 16/04/2014 11:11 EB_0514 11 28/04/2014 11:40 INTERACTIVE

@ email us at [email protected] with your views

LOVEWELL'S LOGIC LINKEDIN DISCUSSION BOARD In her weekly blog, Debi employers which have responsibility, not [just] getting O’Donovan, editor of already staged for past the fi nishing line. Many Debbie Lovewell-Tuck Employee Benefi ts, auto-enrolment are now [employers] found that their suggests bosses asked why some large already reviewing what chosen solution required too great should play fair with employers are re-doing they did. an administration burden or simply staff over bonuses auto-enrolment. failed to cover essential elements She wrote: “In the past Many simply of the [auto-enrolment] process, few weeks, just about every @ underestimated the leaving some signifi cant gaps in pensions adviser and provider I task they faced, and focused too the compliance chain. Sharing bonuses with have spoken to has talked about much on staging without suffi cient David Roderick, development staff will pay off how increasing numbers of consideration that it is an ongoing director, Johnson Fleming

With so many stories of company executives taking home extortionate (to the average worker) bonuses hitting the 100 Club headlines recently, it was refreshing to column hear of Next chief executive Simon Rosemary Lemon looks at staff wellbeing Wolfson’s approach to his bonus payout. This month, about 19,400 staff who In association with have worked for the retailer for at least three years will receive a one-off bonus Showing the benefi t of benefi ts worth an average of 1.5% of salary after Wolfson announced his intention to share With benefi ts, the clue is in the If we get the right balance his £4 million payout from a share- word. What’s more, the of the above, we have a better matching plan with employees. advantage of having benefi ts sense of personal wellbeing. A research study of 266 employees, should be mutual. Benefi ts And, if we feel better about everyday purchases at When 3+1>4: Gift structure and reciprocity should be something ourselves, we can perform well supermarkets, other retailers in the fi eld, by Harvard University considered of value to both the and are more engaged. or on our own products, as doctoral student Duncan Gilchrist, employee and the employer. So it makes sense to well as medium-term savings Harvard Business School professor Too often, they are seen as organise benefi ts in a way to via share schemes and longer Deepak Malhotra and assistant professor ‘normal market practice’ at a support this, for mutual term through the pension. of business administration Michael Luca, certain grade and taken for benefi t. At Legal and General, We also try to help with published last November, found that granted. Or, worse, they are our benefi ts are arranged not peace of mind in a worst-case structuring a portion of an employee’s listed in alphabetical order on in alphabetical order, but in scenario by offering will- salary as a clear and unexpected gift or websites, so that death three key areas. writing services, life assurance bonus led to higher effort for the duration benefi ts feature well before My Health includes all the and dependants’ pension. of their employment. But simply offering share schemes. support benefi ts for helping Embracing all of the above a higher above-market wage from the So what can organisations staff stay healthy, get back to is the employee assistance outset had no such effect relative to do to bring home the benefi t of work as quickly as possible or programme (EAP), which offers paying a market wage. benefi ts? First, everyone has assist in the event of long-term advice and help at all stages of Of course, if staff just receive a token to be clear about their purpose. illness. It includes health fact an employee’s life. amount while others in an organisation And second, it helps to have a sheets, lifestyle assessments, With benefi ts organised in receive much bigger payouts, this is story to bring them to life. occupational health, sick pay, this way, we can bring them to unlikely to have the same effect. Last year, we reorganised private medical insurance and life with stories about how However, where schemes are perceived our benefi ts under the banner group income protection. they are used. In this way, to be more equitable across a workforce, of ‘wellbeing’. This word is My Life includes our benefi ts come to life and show they are likely to be more effective. gaining popularity, but what fl exible-working policies, their purpose. In this age of seemingly ever-larger does it mean? It covers: holidays, childcare vouchers, Hopefully, this way, benefi ts gaps between the highest- and lowest- physical wellbeing, emotional bikes-for-work scheme, will really benefi t everyone. paid staff, should more CEOs consider wellbeing, fi nancial wellbeing, a payroll-giving scheme, and sharing their bonuses with staff? good working environment, learning and development. Rosemary Lemon is group head of reward, pensions and benefi ts at learning and development, and My Money includes short- Legal and General work-life balance. term savings via discounts on Follow Debbie Lovewell on Twitter: @DebbieLovewell The 100 Club comprises industry leading lights who have contributed to Employee Benefi ts

12 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 12 16/04/2014 08:58 Follow us on Twitter: twitter.com/employeebeneﬁ t

TOP 15 MOST VISITED From the frontline STORIES ON THE WEB* Duncan Brown discusses the dangers of cost-competitiveness

Innovative rewards will boost engagement Employee Benefi ts Awards 2014 1 shortlist announced bit.ly/1m2lXvb What if I suggested your performance and Goddard cites the example of James Dyson, Budget 2014: More fl exibility to be reward management strategy for the next 12 whose “on-shoring of prodigious engineering 2 allowed when taking DC pension months must involve a hike in pay levels? talent” means he has created innovative savings bit.ly/1dqjmTs Career suicide for any reward professional? products that sell at a signifi cant price and A number of research studies published profi t premium to his competitors. But he also Employer-supported childcare recently suggest this might well be a sensible manufactures in low-cost locations. 3 vouchers to go bit.ly/1j4232f policy to pursue to enhance the performance The balance in pay management between Court rules IBM breached and productivity of your employees. cost control and rewarding innovation is even 4 employer duties in pensions Recession has seen the number of low-paid harder to strike in the public sector. Blanket, restructure bit.ly/1qWFDOV workers in the UK leap to fi ve million, a larger below-infl ation, 1% pay awards were announced proportion than in any other Western nation bar by the Chancellor in March. But NHS trade Government increases cap on the US. In The Good Jobs Strategy: How the unions are threatening industrial action at the 5 tax-free childcare bit.ly/1peW3Bm smartest companies invest in employees to exclusion from this award of 600,000 health Employee Benefi ts Hot 100 2014 lower costs and boost profi ts, Zeynep Ton, a workers, who are due to receive a pay 6 bit.ly/1hNuz0V professor at the MIT Sloan School of increment averaging 3%. Management, explains how many US fi rms “Innovative In his fi rst public Government sets pension charges responded to recession by focusing on low pay and speech last month, new 7 cap at 0.75% bit.ly/1t00ODx prices and costs, resulting in low-paid ‘bad jobs’ reward NHS chief executive Aon to acquire Lorica Employee with little training and chaotic work schedules. Simon Stevens referred 8 Benefi ts bit.ly/1nmvJWq Ton shows how even in low-margin sectors methods will to the task of meeting such as retail, higher-paying organisations be vital” the huge growth in BP and Tui criticised over investing in their employees are characterised demand for health 9 executive pay bit.ly/1ihXtuP by greater customer satisfaction and higher services within current fi nancial constraints. He Fujitsu launches fl exible profi ts, as well as, not surprisingly, happier staff. said the answer cannot simply be asking 10 retirement bit.ly/1evUE4x In the Chartered Management Institute’s hard-pressed staff to do more for the same pay, article of the year, The Fatal Bias, London but needed big changes, such as “the innovation EXCLUSIVE RESEARCH: Salary Business School professor Jules Goddard comes value of new providers, more professional 11 sacrifi ce cars to see big growth to the same conclusion. He says: “There is a authority for nurses and midwives, redesigned in fl ex bit.ly/OeUozD perilous bias within many top management jobs and pay systems”. EXCLUSIVE RESEARCH: Emergency teams towards what is invariably a losing Innovative pay and reward methods will be 12 eldercare is fastest-growing strategy, that of cost-competitiveness. Every vital, as Stevens says, in the NHS and across our fl exible benefi t bit.ly/1m2mc9D cap on recruitment or training or benefi ts costs economy, to “unleash the passion and drive of is just as likely to destroy, as create, value.” [the million-plus frontline NHS staff] who are Creating an employee value Far too much management attention is devoting their professional lives to caring”. 13 proposition to win the war for talent devoted to the former rather than the latter, bit.ly/1pyb2s6 when what most employers need is “bolder Follow Duncan on Twitter: @duncanbhr Budget 2014: Personal allowance investments and higher costs”, he says. 14 increase could impact auto- enrolment eligibility bit.ly/1gAwjtZ

How to maximise savings from MOST TALKED-ABOUT NEWS 15 tax-effi cient benefi ts bit.ly/1mT6uea Ranked by the number of page impressions Fujitsu UK and Ireland rolled out a date, with only a partial reduction While, on the face of it, this looks from 18 March to 11 April 2014 fl exible retirement policy in April in pay. a very generous approach, I’m sure which enables employees over Fujitsu will also be a benefi ciary of the age of 55 to reduce their This is really innovative and this strategy. working hours in the two years @ also an intelligent approach to Niall Ferguson, strategic alliances, before their chosen retirement phased succession planning. Now: Pensions

www.employeebeneﬁ ts.co.uk I May 2014 I 13

EB_0514 13 16/04/2014 08:58 book UPCOMING now COURSES

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EB_0414EB_0514 5914 05/03/201417/04/2014 14:1610:23 @ www.employeebenefi ts.co.uk/benefi ts/pensions PENSIONSFEATURE PENSIONS IN NUMBERS Jennifer Paterson rounds up recent facts and fi gures relating to pensions

Just 15% of respondents said their main reason for providing a DC of HR and are active members of a 13% are members of a pension scheme 91%benefi ts DB pension. stakeholder pension. is to ensure their professionals are employees save members of a pension are of salary is the scheme provided by 59%members of 5%most common for an adequate their employer. a group personal pension contribution retirement. pension plan, while 18% level for HR and benefi ts Source: DC pension strategy survey, published by Towers Watson in March 2014 are active are members of a professionals who are 75%members of trust-based money active members of a DC a DC pension, while 27% purchase scheme and pension scheme. Source:S Employee Benefi ts Salary survey 2014, published by Employee Benefi ts in January 2014

of respondents said 81% the volume of change The average annual management in the pensions sector in the next charge (AMC) for trust-based DC More than 12 months will adversely affect pension schemes is currently THREE MILLION the level of services provided. 0.75% of the fund. employees are now saving Source: Research published by the National Source: Landscape and charges survey 2013: into a pension scheme through Association of Pension Funds in February 2014. charges and quality in defi ned contribution pension schemes, published by the Department for Work auto-enrolment. The and Pensions in February 2014 three millionth worker to be enrolled is employed by West Ham United Football Club. Source: Automatic-enrolment registration report, published by The Pensions TheThThe avaaveragevereragage Regulator in March 2014 combined employer and EMPLOYER CASE STUDIES employee Boeing is to move 68,000 US-based employees The proportion of employees contribution into a new defi ned contribution component of its that belong to a workplace DB pension from January 2016. bit.ly/1jwf3uO to a DC pension increased from 47% to pension Lloyds Banking Group is to revise its pensionable pay cap for scheme now about 35,000 employees who are members of its six defi ned totals benefi t pension schemes. bit.ly/1ixINEl The John Lewis Partnership reported in its annual report that its DB pension defi cit increased by 22% to slightly more than £1 billion, a rise of £181.3 million. bit.ly/1fpTXfF % Links of London has seen 0.8% of its auto-enrolled employees 10Source: Employee outlook: opt out of its new group personal pension (GPP) plan since focus on employee attitudes to pay and pensions survey, its staging date of 1 November 2013. bit.ly/1kNJ1cZ published by the Chartered 10% of Bayer’s 9,000 active pension scheme Institute of Personnel and Development in members have increased their pension 50% February 2014 contributions since the employer rebranded its in 2013, the largest rise since records pension communications in 2013. bit.ly/1oPON3Y began in 1997. Source: 2013 Annual survey of hours and earnings: summary of pension results, published by the Offi ce for National Statistics in March 2014

www.employeebeneﬁ ts.co.uk I May 2014 I 15

EB_0514 15 16/04/2014 12:49 THE BIG QUESTION @ www.employeebeneﬁ ts.co.uk/comments

This month’s big question: Should employers be granted tax breaks on group PMI?

In the current economic Many employers offer PMI The logic of the new climate, any practical in their employee benefi ts tax-free spend of £500 on assistance is welcome and package, which is popular treatment recommended the government should be with staff. Traditionally, by the forthcoming Health applauded for such an this has often been and Work Service (HWS) is intervention if it provides regarded as a benefi t that it encourages respite for hard-pressed solely for the convenience employers to get sick staff organisations. of the employee and, as back to work more quickly, At William Grant and such, attracts tax. so extending the relief to Sons, we already have a group private medical However, with the increasing importance of all employer-provided PMI, up to a reasonable insurance (PMI) scheme extending across all attendance management and the role of work value, must seem equally sensible. employees and, in many cases, their families. in keeping employees healthy, it seems an However, ministers have to look at the We use an occupational health service for appropriate time to reconsider this. Exchequer cost and likely behavioural impacts employment-related assessments and support. That the new £500 tax exemption for of every new policy. The HWS referral We offer various wellbeing and health-related employer-funded occupational health requirement will keep the cost of the new support mechanisms, and manage absence in a treatments, announced in the Chancellor’s £500 occupational health relief within bounds. fair but robust fashion. The upshot is an 2013 Autumn Statement, will be expanded to A blanket relief for employer PMI is absence level that will rarely reach 3%. cover treatments recommended by employer- inconceivable: it would cost too much. And it Would tax relief bring any change to those funded occupational health services is very could be expected to spawn a new industry in practices? No. However, the government’s welcome and very timely. tax-free PMI funded by salary sacrifi ce. initiative leads to other questions, some with a But it raises the question: why are only It could be fundamentally the same as more political dimension. treatments recommended by occupational employer-supported childcare: tax and national Why has the government made this a health tax-exempt? Why not other treatments? insurance contribution (NIC) free within limits, funding priority? Why is there a belief that There has been improvement in NHS waiting provided it is on offer to the whole workforce. there is a role for the government in this times in recent years, but privately delivered But look what is happening with childcare. process, when it should lie in the domain of the investigations into medical conditions are often The £55-a-week policy, because of salary employer? Is this the usual ‘lowest common quicker. Privately delivered treatments are a sacrifi ce, is costing the Exchequer so much denominator’ approach, to bring up those benefi t to both the individual and the employer, that tax-free childcare will replace it in 2015. employers that don’t do enough or positively allowing an employee to be investigated, Tax-free childcare is more generous, at a encourage those that can’t afford to do more? treated and back to work quickly. maximum of £2,000 per child (clever politics), Either way, with close scrutiny of the use of Also, as well as being swift, private but employers will not be able to fund it using scarce public funds and the notion of value for treatments can be arranged in advance and so salary sacrifi ce arrangements. money, I would have thought there were more are easier to plan. When pay reverts to pre-sacrifi ce levels for pressing (business) priorities elsewhere. This being the case, surely the advantages of those parents who switch, the extra tax and Indeed, with an ageing population, rampant speedy return to work with minimal disruption, NIC take for the Exchequer might just about medical infl ation and the challenges created by causing less pressure on profi tability, would fund the new scheme. immigration and healthcare tourism, perhaps make it advantageous to stop considering PMI So, a new tax relief for employer-provided the government would have been better as a benefi t and more as a recognisable tool of PMI would, arguably, be good for UK plc, but advised to focus such funds and resources on running and managing a business, hence would taxpayers whose employers do not offer the NHS rather than tax relief for PMI provision. attracting tax relief? a scheme be prepared to foot the bill?

Gary Brewer is head of reward and organisational Dr Lucy Wright is chief medical ofﬁ cer of David Heaton is a tax partner at development at William Grant and Sons OH Assist Baker Tilly

Do you agree with these views? Join the discussion by searching for the EmployeeBeneﬁ ts group on

16 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 16 15/04/2014 12:24 EB_0514 17 28/04/2014 10:38 bigblue

Welcome to Bigblue

EB_0514 18 16/04/2014 12:18 @ www.employeebeneﬁ ts.co.uk/jobs UP CLOSE AND PERSONAL

Every little helps to take up reward opportunity Sarah Purnell, head of UK reward and beneﬁ ts at Tesco, is an accountant by trade but says she was in the right place at the right time when the retailer needed someone to step in and run its reward team temporarily

arah Purnell, head of UK development and central reporting of reward and benefi ts for Tesco’s reward and benefi ts at at Unilever to Ralph Lauren’s outlet UK workforce. She is proud to have Tesco, says she found her and full-price businesses. achieved successful pay increases, Q&A Sway into the reward and “I came to Tesco as a fi nance through union negotiations, for benefi ts profession by being in the person and did various roles,” she more than 200,000 staff at the What has been the biggest focus right place at the right time. After says. “I am an accountant by trade, organisation. She plays a leading in your role? spending four years at Tesco as a and it was great fun training, but I role in pay negotiations each year. My biggest focus, which I think is business analyst and an IT fi nance was looking for new opportunities Purnell leads a 10-strong team, my proudest moment, was going manager, Purnell became interim and Tesco gave me that.” who have a mixture of through the pay negotiations reward and benefi ts manager after backgrounds, and says her process for more than 200,000 returning to the organisation after department’s success depends on staff. It has been a real stretch for a few months spent travelling. being able to handle and enjoy me and is really different to what I “I am fortunate because Tesco constant change. have done before. I am proud that has a really strong talent planning Initially, it was short- “There isn’t one size fi ts all in I have played a part in trying to do process,” she says. “There was an the benefi ts world,” she says. “We the best we can and get the best opportunity to run the reward and term but I asked if I have a team of 10 and we are all pay increases for employees. benefi ts team while Tesco was could do the role a from different backgrounds. Some looking for a replacement. little while longer” people are external, some have What one tip would you give “I was in the right place at the come from the stores and others someone looking to get into your right time. Initially, it was short- have had a background in reward. current role? term but I asked if I could do the The Tesco brand was just one Everyone brings something It is about bringing something role a little while longer and, driver for her joining. She feels her different and it works really well. new in. It can depend on their fortunately for me, Tesco was background in fi nance gave her “With a diverse workforce, there background, skills and happy for me to stay on.” the experience to lead the reward is not just one skillset. The thing management. It’s about having a After graduating from Aston team at Tesco. “There are some we have in common is customer different view, a fresh pair of eyes University, Purnell became a similarities,” she says. “There is the focus and the drive of thinking: and looking at things from a fi nance analyst at Unilever before analytical and numbers side as ‘what’s right for colleagues?’” different perspective, and being moving to a similar role at Ralph well as the people element to the Purnell sees herself staying comfortable with the reputation Lauren. In these early roles, she role. I enjoy that: the teamworking, with Tesco, anticipating future and size of the organisation. was responsible for supporting the training and development. I opportunities. “I am a loyal Tesco different parts of the businesses. guess the two go together.” person; I was before I worked What would you like your next This varied from new product Purnell looks after all elements here,”h she says. “It’s a large career move to be? organisationo and very diverse. I am I am still relatively new to the stills relatively new and still learning benefi ts world and I am still CURRICULUM VITAE anda understanding new things. It is learning and understanding. whatw I enjoy.” Robert Crawford Because of the type of organisation Tesco is and the December 2011-present head of UK June 2005-March 2007 fi nance Purnell will lead a speaker constant change, it doesn’t mean reward and benefi ts, Tesco analyst, Ralph Lauren session entitled ‘The outlook for the role is always the same. It October 2010-August 2011 IT March 2004-June 2005 fi nance reward and benefi ts as the doesn’t change fundamentally, but fi nance manager, Tesco analyst, Unilever economy improves’ at the there is always something new April 2007-September 2010 September 2002-March 2004 Employee Benefi ts Summit coming in and I really enjoy using business analyst, Tesco fi nance graduate, Unilever on 14 May 2014. my skills in different ways.

www.employeebeneﬁ ts.co.uk I May 2014 I 19

EB_0514 19 15/04/2014 17:17 PENSIONS @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/pensions

IF YOU READ NOTHING ELSE, READ THIS. . .

> The Pensions Regulator’s code of practice sets out six principles and 31 quality features for employers.

> The code is useful to help employers meet pension governance requirements.

> TPR expects pension schemes to comply with the code.

> The code may need to be rewritten if the government introduces new measures.

employees and employers.” Richard Wilson, policy lead for DC pensions and investments at the National Association of Pension Funds (NAPF), says: “There are many employers and trustees following TPR’s THE BEST ROUTE principles. They fi nd it useful for their schemes and are able to correctly document, as well as Guidance from The Pensions Regulator offers help in consider, all of the right issues. This sort of guidance can help them think about what to do DC scheme governance, says Robert Crawford to get a better scheme and offer better outcomes for employees.” ood governance is a key issue for communications to ensure members make The code of practice is not a statement of defi ned contribution (DC) pension informed decisions about retirement savings. the law, although TPR expects employers to schemes, but it can be tricky to Phil Yeoman, head of DC policy at TPR, says: comply with both the code and its guidance. keep on top of at all times. To help “The code of practice focuses on quality And although no direct penalty applies to with this task, The Pensions features related to the requirements of schemes that fail to comply with the code, its GRegulator (TPR) published its DC code of pensions legislation. The DC regulatory quality features are underpinned by legislation. practice and regulatory guidance, Principles guidance addresses those DC quality features Therefore, if a TPR quality feature is absent and features for good-quality pension schemes, that refl ect our view of good practice.” from a scheme, it is likely to be in breach of the in November 2013. One of TPR’s quality features requires law. In such cases, TPR will use the code as a The advice, which is aimed at trust-based DC trustees to carry out regular strategic reviews, core reference if it has to bring enforcement schemes but can also apply to contract-based perhaps every three years. Employers should action against a scheme in relation to breaches plans, sets out six principles and 31 quality use this to ensure their scheme continues to of pensions legislation. features that, if followed, can help improve be fi t for purpose for members and Evershed’s Swift says: “Trustees and pension scheme member outcomes. competitive with other options in the market. employers should already be complying with The principles cover a number of key issues the code of practice. I worry that there is too for DC plans. First, they set out essential Peace of mind much compliance out there to follow, and that scheme characteristics, such as ensuring all Sarah Swift, partner at law fi rm Eversheds, some things are being missed.” members get value for money and that all says: “This is a useful summary of what to do However, new government measures costs and charges borne by members are and, if followed, a pension scheme will probably around pension scheme governance may transparent and clearly communicated. be in a better place in terms of governance. prompt the regulator to review its DC code of Second, they help to establish governance, Employers will have peace at mind that they practice and regulatory guidance. for example by requiring those running are delivering a good-quality scheme for staff.” The government’s command paper, Better schemes to support employers’ responsibility TPR has also published a standardised workplace pensions: Further measures for to provide accurate information to pension governance statement, which employers are savers, published on 27 March, set out new advisers and service providers, ensuring advised to ensure trustees use to assess their moves to improve DC schemes. Latest suffi cient time and resources are made scheme against the regulator’s quality measures include the introduction of available for ongoing governance. standards. This can help to identify risks and independent governance committees The principles also set standards for those see where standards fall short. accountable for scheme decisions and who Yeoman adds: “This governance statement is monitor governance, make sure schemes are useful for employers in explaining scheme @ Read TPR and FCA launch DC pension regulatory guide at bit.ly/1jAE2f3

Thinkstock well administered, and set out required standards. It should be made available to both

20 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 20 15/04/2014 17:13 A selection of rewards to suit all tastes

Flexible benefits delivered in the context of a total reward framework will help your organisation to attract, retain and engage the best talent. At the same time, a properly constructed employee benefits programme can help you to take control of your benefits costs and ensure you are getting value for money. Towers Watson’s thought-provoking ideas, sustainable solutions and proven results can help you improve the flexibility, efficiency and cost management of your employee benefits programmes. To find out how you can benefit from our solutions, visit towerswatson.com

Towers Watson. A global company with a singular focus on our clients.

Benefits Risk and Financial Services Talent and Rewards

towerswatson.com towerswatson.com Copyright © 2013 Towers Watson. All rights reserved. TW-EU-2012-26274.Copyright © 2014 Towers March Watson. 2013. All rights reserved. TowersTW-EU-2012-26274. Watson is represented March 2014. in the UK by Towers Watson Limited and Towers Watson Capital Markets Limited. Towers Watson is represented in the UK by Towers Watson Limited.

EB_0514 41 28/04/2014 10:02 PENSIONS @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/pensions SLOW OFF THE MARK Some payroll providers are getting left behind in the auto-enrolment race, says Robert Crawford

rising number of horror stories are IF YOU READ NOTHING ELSE, emerging from employers and READ THIS. . . pension providers about how some payroll providers have failed to step > Processing pay and pension contributions up to the mark on auto-enrolment. has been an issue. APayroll is vital for the smooth delivery of > Auto-enrolment consultants have seen auto-enrolment. It is the function that holds organisations’ payroll providers over-sell and transfers the crucial data that enables their solutions. employers to comply with the legislation and enrolled think their payroll systems will cope. ensures the right employees contribute the > A second wave of purchasing is taking A number of middleware products have right amount to pension plans at the right time. place, with employers switching providers. been developed to automate the process of If pensions and payroll managers cannot auto-enrolment and smooth the path between identify, for example, job holders within the pay payroll and pensions administration. and age brackets laid down in the legislation, as stepped up their game, but it is late in coming,” Middleware suppliers say their technology well as opted-out staff, plus a range of other says Futcher. eases the burden of auto-enrolment, but critics auto-enrolment parameters, they will be left Compared with pension providers, many say it is too complex and expensive for most with a headache, and employers will fall foul of payroll providers were slower to get to grips auto-enrolment needs. Sean McSweeney, The Pensions Regulator. with auto-enrolment, possibly because they auto-enrolment specialist at Chase de Vere, Unfortunately, some payroll providers have were focusing on real-time information (RTI) says: “A technology solution can radically been slow to change their systems to cope legislation, which took effect on 6 April 2013. reduce and even automate auto-enrolment with auto-enrolment, which took effect for Jamie Jenkins, head of workplace strategy at compliance. The downside is that middleware large employers from October 2012. The tight Standard Life, says: “Pension providers were can be expensive and even over-engineered.” timescales of processing pay and pension working on auto-enrolment earlier than their The payroll market is seeing a second wave contributions have been a particular issue. payroll counterparts, but payroll plays an of purchasing as some employers change Mark Futcher, a partner at Barnett important part, if not an equal role.” providers because their existing one could not Waddingham, says: get its system up and running. “We are seeing a Several systems Melissa Goddard, director of pension number of Many employers have several payroll systems solutions at Ceridian, says: “Organisations need problems with in place, and larger organisations could have to really think about what solution they are payroll providers dozens running at the same time. It is the data going with because it may not work with their that have left many that feeds to and from these multiple payrolls pension provider. We have seen a second wave organisations having that can throw up the biggest challenges. of purchasing because of these problems. to upgrade, switch “This is where the complexities come in,” “The general issue we have seen is that providers or buy extra says Jenkins. “Employers don’t have one payroll, organisations are trying to join up two different modules because it went they have several. Quality of data is required for functions that have traditionally never had wrong.” auto-enrolment, and it is generally greater than anything to do with each another. Some employers are usual. Different pay periods and payroll cut-offs “Suddenly these two third parties have to having to run dual have also made it more complicated.” talk to each other. Employers are seeing they payments because their The Employee Beneﬁ ts/Capita Pensions have not come together in the right way.” payroll provider Research 2013, published in August 2013, With the payroll function playing catch-up on Thinkstock over-sold its auto- found that of the 108 respondents that had auto-enrolment, employers face having to put enrolment solution. auto-enrolled staff, only 43% said HR/payroll in a lot of effort to keep on track with “Payroll providers are systems could cope with auto-enrolment rules. implementation and compliance now seeing and This indicates that those yet to comply with understanding the auto-enrolment are in for a nasty shock, importance of auto- because the same research found that 77% of @ Read more on payroll, RTI and auto-enrolment at bit.ly/1lKyBwa enrolment and have the 236 respondents that had not yet auto-

www.employeebeneﬁ ts.co.uk

EB_0514 22 15/04/2014 17:15 Greater visibility into benefi ts suppliers

Employeebenefi ts.co.uk is the research tool and reference source for the employee benefi ts industry. Up to 80,329 unique reward and benefi ts professionals like yourself visit the site each month. Nearly 9,000 of you are specifi cally using the site to search for in-depth information about suppliers and advisers. There is no better way to evaluate the benefi ts supplier market than with Oracle; a convenient, in-depth research tool. Up to date content for suppliers and advisers, which includes news, research, white papers, case studies and videos, will allow you to assess and benchmark their off erings.

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EB_0514 23 28/04/2014 16:46 Get even more drive from your employees with the industry’s brightest sparks

Be a part of our bright future; where we can help you to Be a part of our bright future; where we can build the Award-winning expert providers of deliver a vehicle based benefit to every employee group perfect car scheme for you. It will include our advanced, within your company. Our innovative car schemes include vehicle based benefits that reward both online systems, our industry renowned expertise and a advanced, award winning online systems, our industry Zenith is the Fleet News ‘Leasing Company of the Year’ high quality service offering. We can help you reward you and your employees renowned expertise and a high quality service offering. 2012 and 2013! Our Salary Sacrifice and company car what matters most; your people. Ourschemes salary won sacrifice the Employee and company Benefits car schemesAwards 2012, can offer car We can help you reward what matters most; your people. thebenefits best of category both worlds, and our helping software you drivehas won employees’ awards too. loyalty, motivation and satisfaction. Many major UK Your employees deserve the best; find out what we companiesOur customers are already include taking many advantagehousehold ofbrands, our flexible some of can do for your company today. schemes and fleet management solutions.

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EB_0514 24 25/04/2014 10:57 @ www.employeebenefi ts.co.uk/benefi ts/company-cars-and-fl eet CARS

GET IN GEAR FOR SUMMER The summer months pose particular problems for business drivers to deal with, whether in this country or abroad. Tynan Barton offers ﬁ ve top tips

s the warm weather and summer Consider fuel use some European countries require drivers by holidays approach, employees with 2 Driving with the windows open in the law to carry a fi rst aid kit, fi re extinguisher, company cars should be made summer months can cause extra drag to a car, warning triangles, refl ective jackets and aware of some of the hazards that leading to increased fuel consumption. Air headlamp defl ectors. can affect driving in the summer. vents can help to reduce this drag. According to the Institute of Advanced A Hogsden says: “Most cars come with air Motorists, drivers in Spain are required to Beware high temperatures conditioning these days, but it’s a case of carry two warning triangles, whereas in 1High temperatures can cause problems for keeping it at an appropriate level, or turning it France, all drivers and motorcyclists must drivers, whether in the UK or overseas. off when it’s not needed.” carry a breathalyser kit containing two Andrew Hogsden, senior manager, strategic Employees should check their air disposable breathalysers. fl eet consultancy team at Lex Autolease, says: conditioning system before a journey. Alan “High temperatures can affect tyre rubber, and Hillier, marketing and data leader at Pendragon Ensure insurance and under-infl ation can add to the problems.” Contracts, says: “It’s recommended that it is 5breakdown cover are adequate Staff should check their tyres regularly, and serviced every two years.” When driving abroad, employees must also make sure they are correctly infl ated according If driving abroad, staff will fi nd that as speed ensure that they have appropriate insurance to the weight of any load that is being carried. limits vary, for example on a German autobahn, and breakdown cover. Hot weather can also cause problems with fuel planning is essential. “If driving on an Lex Autolease’s Hogsden says: “Most the cooling system. “It is worth looking at the autobahn, you are allowed to drive a lot faster insurance policies will give them cover if taking coolant levels in the engine and checking for and so will use a lot more fuel, so fuel planning a car into Europe, but not all standard policies leaking hoses,” says Hogsden. “The time when is important,” says Hillier. “Also, if [an employee] necessarily cover driving overseas.” that is likely to become apparent is when [an is not used to driving at high speed, they will Employees driving a leased car abroad must employee] is in slow-moving traffi c. Checking need to allow more time for people overtaking.” have the necessary paperwork. Pendragon the coolant reservoir level is quite important.” Contracts’ Hillier says: “If it’s a leased car, they Be mindful of speed limits have to get a V103 form, which allows them to IF YOU READ NOTHING ELSE, 3 Drivers must also be mindful of the fact drive the car abroad. They need to check with READ THIS. . . that speed camera detectors are illegal in some their fl eet manager about the extent of their European countries, so these must be switched breakdown cover. With a leasing company, this > Staff who drive abroad should perform off. This includes disabling the function built is normally covered.” essential car maintenance checks, such into satellite navigation systems. So, there is a lot for employees to think as oil, cooling fl uid and tyre pressure. about when driving a company car, especially in the summer months, and employers have a > Drivers should be familiar with the driving Carry essential equipment rules in the countries they plan to visit. 4 Wherever they are driving, there is a range duty of care to support them of essential equipment that drivers should > A leasing fi rm can advise employees on carry in their car. @ Read also Employers’ legal and moral obligations their breakdown cover when abroad. As well as spare bottles of oil, water, to their drivers at bit.ly/1oTj021

Newspress windscreen wash ﬂ uid and engine coolant,

www.employeebeneﬁ ts.co.uk I May 2014 I 25

EB_0514 25 15/04/2014 12:30 HEALTHCARE @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/healthcare-and-wellbeing TIMELY TREATMENT Dental perks can reduce staff time away from work, says Robert Crawford

lesseninglessenin employees’ time away from the ofoffifi cece,”,” says Denplan’s Matthews. “If dentists can hehelp spot and thwart diseases, they can prpreventeve emergencies from happening.” OtherOt elements of an employer’s health and wewellbeingllb strategy could also affect employees’ dedentaln health. For example, employers could coconsidern reviewing the food and drinks avavailablea on site, whether these are provided frfree or through an on-site restaurant. The BDHF’s Carter adds: “We are a nation of ssnackers. Employers can discourage snacking on sugary goods and drinks and even review IF YOU READ NOTHINGNOTHING ELSE, READ THIS. . . the food in the canteen and vending machines. entalental bebenefinefi ts should not be There could be healthier alternatives.” overlooked in anyy aabsencebsence > Dental benefits can reduce When considering dental benefi ts, management strategy. In some ththee likelihood of emergencemergencyy employers should bear in mind that providing cases, they can have a signifi cant dedentalntal aappointments.ppointments. these perks could make the difference effect on the amount of time an between staff seeking treatment or not, either Demployee is away from work. > Dental care can reduce the riskk of cchronichronic routinely or as an emergency. An employer can offer dental cover via diseases and long-term sickness absence. Research published by the BDHF to coincide benefi ts such as a cash plan or dental with National Smile Month in May 2013 found > Employers should look at better insurance. Helping staff to maintain good oral that 19% of respondents delayed dental communication of dental perks. health may lessen the likelihood of them treatment because of the cost. The research needing emergency treatment and taking extra also found that 88% of adults do not have time off work. development of chronic diseases, such as dental insurance and 63% use NHS services. Roger Matthews, chief dental offi cer at diabetes and cardiovascular disease. Denplan, says: “There is a recordable loss from Dental experts also say there is a link Share responsibility sickness when employees have to have between poor oral health and dementia, heart Shires says: “People are used to paying for emergency appointments.” attacks and strokes. Carter says: “Improving dental treatment and regular appointments Employers can also use general health and healthcare can cut down on some of the links can soon stack up. Some people think the cost wellbeing communications to encourage staff between poor oral health and life-threatening of treatment on the NHS is too much, which to have regular dental check-ups, or promote diseases. These are all conditions that could means they are likely to forgo treatment. dental health at events such as benefi ts fairs. result in considerable time off work.” “Employees now expect their employers to Paul Shires, executive director at Westfi eld The BDHF estimates that UK businesses lost pay for schemes or share the responsibility.” Health, says: “People delay dental treatment, £36.6 million in 2012 due to employees taking So, if used properly by employees and which means more time is spent out of the time off work because of dental problems. “The communicated well by employers, dental offi ce when conditions worsen.” key thing to know is that prevention is better benefi ts can have a real impact on staff health. Dr Nigel Carter, chief executive of the British than cure,” says Westfi eld Health’s Shires. As Denplan’s Matthews says: “Dental benefi ts Dental Health Foundation (BDHF), adds: To help prevent dental problems, employers will help staff because they will be less likely to “Toothache, dental abscesses and missing could offer staff paid time off to attend suffer from dental emergencies, and less likely teeth are reasons why employees take time off appointments, bring dentists on site or offer a to develop further conditions that could give work. If employers educate staff on how to dental benefi ts scheme that covers employees rise to long-term sickness absence.” maintain a good oral hygiene routine, there is for treatment at dental practices close to their no reason for these problems to develop.” workplace, which will minimise the time it Something many employees may not realise takes to attend appointments. @ Read also Buyer’s guide to group dental plans at bit.ly/1sLRzXo

Thinkstock is the link between poor oral health and the “Dentists have a powerful role to play in

26 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 26 15/04/2014 12:31 Fitting in dental visits between work and family life can be difﬁ cult

That’s why we make it easier for employees to visit the dentist using their Denplan dental plan

There are many benefits now available for employers to offer, but not all are applicable to all employees. A dental plan is a tangible benefit that can be used regularly and * appeals to employees of all ages, helping with recruitment 75% and retention. Seeing a dentist regularly means that dental of employers problems can be detected early and avoid the need for with a dental lengthy absence from work. We provide employees with the flexibility to use any dentists, giving them a wider choice, plan agree that it and higher chance of attendance. helps reduce time away from work A Denplan dental plan provides a simple, affordable and to attend dental effective solution to protect the health of your employees. appointments

Give us a call now to find out more 0800 587 1019 www.denplan.co.uk/companies

*Denplan decision-makers survey, January 2014. The survey was completed by 488 respondents.

That’s the world of Denplan for you.

Denplan Limited, Denplan Court, Victoria Road, Winchester, SO23 7RG, UK. Tel: +44 (0) 1962 828 000. Fax: +44 (0) 1962 840 846. Email: [email protected] Underwritten by Simplyhealth Access. Part of Simplyhealth, Denplan Ltd is an Appointed Representative of Simplyhealth Access. Simplyhealth Access is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Denplan Ltd is regulated by the Jersey Financial Services Commission. Premiums received by Denplan Ltd are held by us as an agent of the insurer. Terms and conditions apply.

CAM1105 04-14

EB_0514 27 16/04/2014 12:07 LAST FEW PLACES

REMAINING!

THE EMPLOYEE BENEFITS SUMMIT 14-16 MAY 2014 Delegates already confi rmed include: ASIA GARDENS HOTEL & SPA • Tesco • Cognita Schools • B&Q • ALICANTE, SPAIN Ocado • EVERSHEDS LLP 14-16 MAY 2014 • SABMiller plc • Speedy Services • ASIA GARDENS HOTEL & SPA • Alicante, Spain Nomura • Vodafone • Coca-Cola • PageGroup • Hermes-Europe • British Gas • RBS • Unisys Ltd Meet, learn and network with other benefi ts • ICAP MANAGEMENT SERVICES • TJX Europe • RAC • OpenBet managers at the forefront of change. • Banardos • Britvic Soft Drinks The 9th annual Employee Benefi ts Summit will again unite senior benefi ts • Centrica • River Island • William Hill PLC • Home Retail Group • The professionals, providers, consultants and experts from across the UK and Europe. Hyde Group

Attendees will be informed and inspired at a two-day schedule of high-level “Extremely well organised and executed. conference sessions and meetings with relaxed networking at mealtimes and Great opportunity to learn more about the big issues in comp & bens and meet in the evenings. colleagues from other organisations. Held at Asia Gardens Hotel & Spa, Alicante, Spain the event will facilitate open Would come every year if I could!” Ellie Vaughan, People Data & Reward Manager, discussion and the exploration of the year’s most important issues away from Alzheimers Society daily distractions. “Brilliant summit, very motivational, inspiring and thought-provoking. Valuable Register your interest in attending at networking opportunity. Fantastic location and venue” www.employeebenefi tssummit.co.uk Sushma Dhonsi, Benefi ts Manager, EMC Computer Systems UK Ltd Sponsorship Enquiries: Suzanne Saunders – T: +44 (0)20 7970 4929 – “Informative thought-provoking and challenging” E: [email protected] Leanne McLean, Senior General Manager, Reward Delegate Enquiries: Jessica Oliver – T: +44 (0)20 7943 8133 – (UKIN), CEVA Logistics Ltd E: [email protected] “A true chance to share what good practice will be and refl ect on current issues” Laura Edge, Pensions Manager, The London School Sponsored by of Economics “The benefi ts summit was full of new ideas to take away and the networking opportunities second to none” Kay Schoonderwoerd, Head of Compensation, Benefi ts & HRIS, Neopost Ltd

EB_0514 28 17/04/2014 10:24 @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/share-schemes SHARES KEEP THE TAX SLICE SMALL Some big share payouts are expected this year, so employers need to educate staff about the possible tax implications, says Debi O’Donovan

his year, employees at BT, BSkyB and shares on the same day, they will not generate within 90 days of exercise. Staff need to inform Whitbread have got their collective CGT. Sip shares can be exited at any time, but their Isa provider that it is an employee share hands on shares worth tens of staff should be directed back to the plan rules plan in order to maintain the tax wrapper on the millions of pounds. And because share so they are aware of the implications of exiting shares. If the 90 days fall over two tax years, prices have been climbing steadily before the shares are fully tax-free. they should be able to use an Isa in each year. Tsince the market bottomed out fi ve years ago, Close Asset Management’s Makings says: big gains are due for many more workforces 2. The need to pool shares “Quite a lot of people who want to realise gains that are saving into three- and fi ve-year To calculate a share gain, staff need to use an will wash it through an Isa so they won’t have to approved employee share plans, such as average base cost of all their shares. This pay CGT on that amount.” sharesave and share incentive plans (Sips). applies when they own the same-class shares But this sweet prize could leave a sour taste in the same company bought at different times. 6. Transfer shares into a Sipp if employers do not educate staff about the tax Inez Anderson, tax partner at Smith and As with Isas, a Sipp protects share gains over implications of taking this new-found wealth. Williamson, warns: “Staff must remember that the £11,000 tax-free CGT limit and the transfer Here are seven points to consider: it is not just the shares they have just acquired. needs to be done within 90 days. High earners The pooling aspect can be quite complex, so it and those with large share gains should note 1. Capital gains tax may be due would be worth talking to a tax adviser.” that the annual allowance for tax-free pension Jeanette Makings, director, fi nancial education contributions is £40,000 and the lifetime services at Close Asset Management, says: 3. CGT allowance is £11,000 allowance is £1.25 million. “Staff have to remember that if they want to Above this amount, CGT is charged at 18% use the capital they have built up, they will have (lower-rate taxpayers) and 28% (higher-rate 7. The impact of dividends to liquidate the asset at some point. They will and above taxpayers). Employees earning just below the higher-rate pay tax only on a bit of the wealth they have Anderson warns: “In rare cases, someone income tax bracket need to be careful that any created, not all of it.” who pays the 20% income tax rate could sell dividend payouts do not take them into the In sharesave, capital gains tax (CGT) is based shares and, because the gain is added to their next tax bracket. Phil Ainsley, managing on the difference between the price of shares income, they could go into the 28% CGT rate.” director, employee benefi t solutions at Equiniti, at exercise and the price at which the options Gains of more than £11,000 can be mitigated says: “Although that probably wouldn’t be were bought (also see point 2). in three key ways: transfer to a spouse, to an known until [the employee] has to do a tax With a Sip, if an employee buys and sells the individual savings account (Isa) or to a self- return at the end of the year.” invested personal pension (Sipp). Staff with big share gains should consider IF YOU READ NOTHING ELSE, the cum-dividend (cum-div) and ex-dividend READ THIS. . . 4. Transfer shares to a spouse (ex-div) date of shares before exercise. This is If an employee has a spouse or partner who when a declared dividend belongs to the seller > Many large employee share plan payouts has not, and will not, use their own full CGT rather than the buyer. The share price is are expected this year. allowance within a tax year, that employee normally higher cum-div and lower ex-div. can opt to transfer shares to their spouse. In “I would not transfer shares into the Isa until > Good employers will ensure staff are this way, up to £22,000 of gains can be after that cum-div date has been paid, so I can informed about the tax implications. protected from CGT. get more shares into my Isa,” says Ainsley > Gains of more than £11,000 can be mitigated by transfer to a spouse, to an 5. Transfer shares into an Isa The Isa investment limit will be £15,000 a year @ Read also Why share schemes remain a valuable Isa or to a self-invested personal pension. employee benefi t at bit.ly/1hoSDfw

Thinkstock from 1 July 2014. Shares must be transferred

www.employeebeneﬁ ts.co.uk I May 2014 I 29

EB_0514 29 15/04/2014 12:32 COVER STORY FOOTPRINT OF RESPONSIBILITY Corporate social responsibility has become a vital part of business strategies, says Clare Bettelley

mployers’ commitment to corporate social responsibility (CSR) varies hugely. There are market champions that fully embrace the concept and underpin their business with a Ebespoke strategy, while some organisations are unconvinced about the business benefi ts that a strategy can bring. Employers in the middle of these two extremes are left grappling with exactly what CSR means. The term CSR is hard to defi ne, which can make it diffi cult for employers to understand where and how to start designing and executing their own CSR strategy. Expanded meaning Steven Hine, head of responsible investment development at ethical research fi rm EIRIS, says: “The term corporate social responsibility, or corporate sustainability, relates to how an employer treats its employees, suppliers and even elements of its philanthropy and work in the community, and that’s the origin of it. But, over the years, it has expanded to include issues around the environment, human rights, bribery, corruption and ethics.”

IF YOU READ NOTHING ELSE, READ THIS. . .

> There is no single deﬁ nition of corporate social responsibility.

> The term increasingly relates to how employers take responsibility for their impact on the communities and environment in which they operate, as well as the way they treat their staff.

> Employers should use their beneﬁ ts package to support and promote their CSR strategy, to optimise its success. Jacko

30 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 030 15/04/2014 17:23 @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/total-reward

Meanwhile, Jonny Gifford, a research adviser at the Chartered Institute of Personnel and Development, thinks CSR is about creating business models that are part of sustainable business ecosystems, and not just making a quick buck (see box, page 36). Stephen Howard, chief executive of Business in the Community (BITC), says this should include the creation of inclusive, healthy and diverse workforces. Employers should also consider CSR in terms of a triple bottom line, which requires them to account economically, environmentally and socially for what they do. Professor Judi Marshall, professor of leadership and learning at Lancaster University Management School, says: “Within that, organisations take a wide variety of approaches to what they think counts and what they think their environmental and social responsibilities are, alongside their fi nancial responsibilities.” CSR champions Retailer Marks and Spencer’s (M&S) approach is to transform itself into the world’s most sustainable retailer by 2015 with the help of its CSR strategy, Plan A. Plan A, which was launched in January 2007, has involved M&S working with its customers and suppliers to combat climate change, reduce waste, use sustainable raw materials, trade ethically, and help its customers lead healthier lifestyles. It has also extended this strategy to its workforce through initiatives such as the offer of free loft or cavity wall insulation that Organisations take a wide accompanied the launch of its Home Energy Service and M&S Energy Home Insulation in variety of approaches to what 2010. To encourage staff to take part, the they think counts and what retailer paid the benefi t-in-kind tax on the perk. they think their environmental It estimated that if all eligible staff took up the benefi t, this could lead to an annual saving and social responsibilities are” of about 13,000 tonnes of carbon dioxide. Judi Marshall, Lancaster University Business School Likewise, fellow retailer Kingfi sher has its Net Positive programme, an environment- focused CSR strategy that aims to support the markets in which the organisation has

www.employeebeneﬁ ts.co.uk I May 2014 I 31

EB_0514 031 15/04/2014 17:23 COVER STORY

the greatest impact: timber, energy, innovation such as private medical insurance, employee ways that we can keep this simple’.” and communities. assistance programmes, bikes-for-work Employers may also consider rewarding BITC’s Howard says: “Part of it is about saving schemes, health screening and even massage. staff with learning and development or money, which is a good thing, and part of it is But support may also be as simple as volunteering opportunities, instead of just about bringing customers along on the providing health-related information on an paying cash bonuses. In the long run, such sustainability journey. When people can intranet site. development opportunities can benefi t the understand this in ways they can believe in, it An appropriate remuneration strategy also business as well as its employees. can have quite a powerful impact on the helps to create a healthy workforce by Law fi rm Withers is one organisation that valuation creation model of that business.” alleviating issues such as fi nancial stress. does just that, offering its legal staff pro bono Employers must therefore consider how their work opportunities and its support staff a Business practices CSR strategy is integrated into their employee community-based volunteering scheme CSR strategies must penetrate the heart of an incentives strategy. (see box below). organisation’s business and underpin all its For example, Howard suggests that business practices, which is why employers rather than incentivising staff using the Executive remuneration should align their benefi ts packages to support organisation’s fi nancial returns, employers But perhaps the biggest area in which their efforts. should consider widening their traditional employers should focus their CSR efforts is This means they must consider the gender parameters of success to include factors such their executive remuneration policy, and age balance of their as customer experience. particularly around bonuses. Investors are organisation, particularly their “We often hear from increasingly fi nding the offer and acceptance executive board, to ensure employers that the reason of bumper pay deals, including excessive their workforce is inclusive We often hear from they are not doing more in executive bonuses, hard to swallow. and diverse. this space is because it feels Barclays is a case in point. In February 2014, Employers must also employers that they too complicated, that they the bank came under fi re from the Trades consider how best to support are not doing more in are under huge short-term Union Congress after revealing it had paid and promote staff health and this space is because pressure and that their bonuses worth £2.4 billion in 2013. This was wellbeing. This may be stakeholders don’t always particularly bad timing, given that the bank is through providing workplace it is too complicated” understand,” he says. “So on a mission to rebuild investor trust. health and wellbeing benefi ts, Stephen Howard, BITC we’re saying, ’let’s think of Howard says trust is a critical element of a

CASE STUDY WITHERS

Help for local unemployed parents For law fi rm Withers, CSR is about unemployed parents. understanding and managing the Sharon Tebb, compensation relationships between its and benefi ts manager at Withers, business and the community, as says: “It is hugely important for us well as the environment and the to participate and give something economy in which it operates. It is back to the local community in also about identifying and which we operate.” supporting staff talent. Tebb, who was appointed to The organisation’s CSR create and manage Withers’ CSR programme comprises a charity programme last year, approaches of the year, volunteering the task in much the same way opportunities, pro bono work for as she runs the organisation’s legal staff, and a mentoring benefi ts programme: through programme for business communication with, inclusion of, support employees. and listening to staff. The programme, which was “The measure of success has launched in November, has been to be the continued engagement designed by Withers and its and commitment from our programme partner, Islington employees to ensure the success programme, she adds. “Our feel part of has a massively Council, to build the workplace of the programme,” she says. employees have a real appetite positive impact on engagement confi dence of programme This has helped to create a for [CSR], and a programme that and creating that all-important participants, who are local return on investment for the they have helped to design and feel-good factor.”

32 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 032 15/04/2014 17:23 successful CSR strategy. “Almost all businesses case in point. “I’m not saying it’s simple, but it’s are operating in an environment where trust not hard for an employer to ask providers how Viewpoint isn’t great, so organisations are thinking about they manage these [risks] internally,” says Hine. how they can regain that trust,” he says. “But it’s an easy thing to talk about and not an easy Limited resources thing to put in place.” Employers with limited resources may opt to Jonny Gifford A good place for employers to start is to create partnerships with relevant trade bodies is a research ensure that their CSR strategies are created and organisations, such as the Fair Trade adviser at the within a moral and ethical framework. Foundation, instead of adopting a more Chartered Institute The ethics of workplace pension schemes is wide-ranging CSR strategy. of Personnel and a meaty topic, and an obvious area of focus for Local council partnerships are also a Development employers that are possibility. For example, law The role of CSR in business formulating a CSR strategy, fi rm Withers runs a particularly where annual workplace mentoring CSR pervades all aspects of a business’s management charges (AMCs) scheme for local operations. In an HR context, it includes are concerned. unemployed parents (see corporate volunteering initiatives and Pensions minister Steve box, page 35). the provision of staff wellness Webb’s decision to cap AMCs Lancaster University programmes, but it also goes much at 0.75% from April 2015 will, Management School’s deeper. It’s about ethical, values-based of course, put pressure on Marshall, says: “The best leadership, human rights, fair wages (at pensions providers to offer businesses are in radically both ends of the spectrum), governance, scheme members more different partnerships with transparency and diversity. competitive charging stakeholder groups in In the short term, it can be more structures, but employers society, such as activist profi table to disregard ethics. But there also have a role to play in groups and local are strong business benefi ts in rooting ensuring charges remain communities.” HR and benefi ts strategies in CSR, even consistently low. In some organisations, Such partnerships are though they can be harder to measure Employers may also cost-neutral and can help than those associated with other CSR consider how much access an ethical option will employers to engage staff in strategies, such as reducing energy use. their staff have to ethical play very well with their business and, more CSR is about the longer term, creating investment fund options. staff and can be importantly, help them to business models that are part of But Paul Lee, head of comply with new legislation sustainable business ecosystems, and investment affairs at the quite important” around corporate reporting. not just making a quick buck. National Association of Paul Lee, NAPF New UK narrative A robust approach to CSR helps Pension Funds (NAPF), says reporting requirements are attract and retain top talent. Research employers must align their efforts with the effective for employers with fi nancial years that we conducted last year, The role of nature of their business and their workforce ending on or after 30 September 2013. These HR in corporate responsibility, found demographics. “In some organisations, an include the requirement to prepare a strategic that 47% of HR and wider business ethical option will play very well with staff and report. Publicly-quoted organisations will be leaders feel employee engagement is a can be quite important, frankly necessary, in required to disclose additional information, key driver for CSR. People want to work order to do what is perceived to be fi tting for including details of human rights issues and for ethical organisations. the nature of the business,” he says. information about the gender split of their Treating staff fairly is vital in the directors, senior management and employees. longer term to keep a workforce Environmental option The health and wellbeing of their employees is engaged. However, the role of HR in CSR “In some places, this can be really important, also an important consideration. really comes alive and delivers business such as in a green-focused organisation, This is why CSR is far from the fl uffy issue it value in ensuring alignment between an which ought to have an environmental option was in danger of becoming, but now relates to organisation’s values and culture and its as part of its defi ned contribution [pension] a legal requirement that employers need to business activity. When CSR and ethics offering. But in a lot of organisations, it will consider urgently form the backbone of organisational feel like an irrelevance.” culture, they become the accepted norm EIRIS’s Hine says employers should monitor for the way things are done. the value for money they are getting for the That is when there is protection advice from their providers, whatever the Clare Bettelley is against a reckless, bonus-fuelled associate editor at benefi t in question. culture. That is when leaders earn trust Employee Benefi ts Organisations should also review the ethics through their integrity. That is when a of providers’ business practices and how they business and the industry in which it manage potential business risks. This year’s @ Read also DOD’s blog: Does your CSR strategy operates are sustainable. take into account staff needs? at bit.ly/OOyJ1J predicted pension provider capacity crunch is a

www.employeebeneﬁ ts.co.uk I May 2014 I 33

EB_0514 033 15/04/2014 17:23 ADVERTISEMENT FEATURE Much more than a fi nancial benefi t Canada Life Group Insurance’s Paul Avis explains how to get the best value from a group risk product

At Canada Life Group Insurance we believe that there is much more to in the income protection scheme or not. This means that you can actively insurance than simply providing a fi nancial benefi t and product. Group risk promote them (using our ongoing communications programme) in your claims do not happen every day, so we aim to provide employers with the workplace. Our ambition is to make sure that as many employees and em- maximum level of value and engagement throughout the policy year. This ployers as possible make the most of what we off er. includes additional services that can be used on a daily basis not only by ● EmployeeCare, our 24/7 Employee Assistance Programme (EAP) off ers employees but often by their immediate family members too at no charge up to 4 face to face counselling sessions (per employee per issue per to them. annum). Working with our third party suppliers we have a clear commitment ● An online health risk assessment and health portal to support health to make sure our non-financial benefits are enjoyed by employees and and wellbeing initiatives in the workplace. their family members, both pre and post claim. To demonstrate this ● Second Medical Opinion service (provided by Best Doctors) to support commitment we have a dynamic, active, employee and employer com- employee and family member decisions on diagnosis and treatment. munications programme. This includes webcasts, posters, guides, case This has been proven to support clinical path decision making which studies, leaflets and bulletins, all available on our website or through can also reduce the need for medical treatments. subscribing to our mailing alerts. To support preventative health and wellbeing, a quarterly report is So what do we off er? available where either the EAP or Best Doctors is used in total 10 times in a quarter. Group Life Our group income protection product also off ers two further levels of As the market leaders in group life we recognise that setting up a support to organisations themselves. BusinessCare off ers online document scheme correctly is crucial in order to obtain the best tax advantages, which creation for employment, Health & Safety and business management and requires having the suitable trust documentation. We therefore provide a a 24/7 employer helpline to discuss specifi c workplace scenarios: this can range of draft trust documentation on our website that can be used to es- help control and reduce legal services costs. tablish your scheme, although we always recommend you seek legal advice to ensure that this documentation is suitable for you. Group Critical Illness: In addition to the payment of a lump sum and / or a death in service Our group critical illness product makes a fi nancial payment on diagnosis pension on the death of an employee, we think a bit wider, as this can be a from a set of nominated conditions but also off ers: diffi cult time for the employee’s family and relatives, and off er: ● The ‘Best Doctors’ Second Medical Opinion Service to employees and ● A 24/7 bereavement telephone helpline for the deceased’s family. family members (insured members only). ● A probate helpline to help deal with family disputes, validity of wills, ● Unlimited access for critical illness claimants to the Red Arc nurse-led creditors, obtaining probate and power of attorney. service which provides unlimited ongoing practical and emotional support – a unique complement to Best Doctors. Group Income Protection ● Procedural support for employees through a claims helpline. Alongside paying a fi nancial benefi t for long term absences to enable salary ● A dynamic, online condition-based, claims guide for potential claim- continuance, we want to ensure the best possible outcome for the employ- ants which can sit on fl exible benefi t platforms or the intranet. ee, so our group income protection product off ers: Finally a point on the support you can expect from us. We insure almost ● Case management from our in-house vocational rehabilitation team 2.75m employees and 21,000 employers. We have not compromised on available from 2 weeks’ absence. Twenty fi ve percent of Canada Life quality here and we have leveraged our economies of scale to deliver the Group Insurance employees work in our claims area and we have a best services we can through the suppliers we have chosen. All have been clear ambition that the quality of support is never compromised. We through a thorough due-diligence assessment and have long-standing appreciate the complexity and emotional nature of employee health. relationships with Canada Life Group Insurance. As you can see there is ● Unlimited access to a medically trained, vastly experienced, locally- much more to our Group Risk off ering than the purely fi nancial aspects of based Rehabilitation Team, at no extra cost. an insurance product. ● Regional Claims Management Consultants who work closely with employers on every claim thereby ensuring clear communication of specifi c case decisions, progress and forecasting of likely absence durations. Uniquely all of the following services are off ered to all employees, whether

For more information please visit our website at canadalife.co.uk/group.

EB_0514 34 28/04/2014 15:42 @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/group-risk GROUP RISK TREADING CAREFULLY

People-related risk is a critical element of any organisation’s total risk management strategy, says Nick Martindale

or most businesses, the issue of risk is alongside these sit people-related risks: the with 47% doing so for life insurance products never far down the corporate agenda. threat of staff becoming unable to work or and 41% for critical illness cover. Whether it is the threat of service leaving the organisation, which tend to fall John Ritchie, chief executive at insurer disruption caused by freak weather, under the remit of HR or benefi ts departments. Ellipse, says there are a number of areas where supply chain chaos resulting from ash This is largely because the policies designed people-related risk could, and should, be seen Fclouds or tsunamis, or the danger of litigation to alleviate these risks are viewed as benefi ts in a broader context, as part of an organisation’s arising from health and safety failings, risk is that can help to attract and retain employees, total risk management strategy. the one topic guaranteed to keep chief and with good reason. Group Risk Employer executives awake at night. Research, published by industry trade body Basic issue Such issues are generally handled by Group Risk Development (Grid) in January 2014, “The disability, absence and health risk is corporate risk management teams, found more than half (56%) of employees put acknowledged as a risk to the business and underpinned partly by insurance policies. Yet income protection in their top three benefi ts, sometimes purchased through the risk manager: the [person] who would be buying IF YOU READ NOTHING ELSE, READ THIS. . . buildings insurance and liability cover for products,” he says. “Aside from all the chatter > Most risk management and represent a business risk to dying or becoming seriously about engagement, there is a basic issue here: insurances are handled by the organisation, particularly ill, can also be a reputational is [the employer’s] pay and benefi ts package risk teams, but people- if the employer’s pay and risk for an organisation. competitive for the people it needs to hire?” related products, such as reward strategy cannot Other matters that could come under a > Group risk arrangements group risk cover, often stay attract or retain top talent. broader risk management strategy include key with HR or benefi ts teams. should be reviewed regularly > Failing to handle people risk to avoid duplication of cover person risk: the risk of a particularly important > People-related risk can adequately, such as staff and to add new services. employee being unable to work; and

Thinkstock reputational risk to the employer brand, which

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EB_0514 35 16/04/2014 10:30 GROUP RISK

can be affected by issues such as how says it is sensible to review group risk policies employers respond when personal crises strike regularly, not least to help identify Viewpoint their staff. “If you have a reputation-based opportunities where rationalisation of business, the way people are treated and how provisions could save paying out for catastrophes are handled is hugely important unnecessary cover. She points to a number of to the brand,” says Ritchie. areas where this could happen, including Laurence Paul Avis, marketing director at Canada Life employee assistance programmes (EAPs) Collins Group Insurance, says closer relationships under group income protection policies which is workforce between internal stakeholders, such as HR and could replace a standalone service, and double analytics benefi ts professionals, can also lead to greater death benefi t payouts as a result of group life director at Deloitte sharing of information, ultimately and personal accident policies. helping to minimise the risk of The market is evolving Employers should focus staff being unable to work, thus constantly, with providers looking on wider business risks reducing the fi nancial damage to Even the most to stand out in the services they employers. offer, says Canada Life’s Avis. “As FTSE employers spend a signifi cant rate-driven well as EAPs, second medical amount of money on risk-related Health and safety product, group opinions, and online or telephone benefi ts, as well as other forms of “For example, health and safety is life, may offer legal and health and safety employee compensation. Organisations likely to keep work-based support, most insurers now offer are, more frequently, putting a spotlight accidents and incidents reporting added-value vocational rehabilitation services,” on these benefi ts to understand the and would be expected to work services” he says. “Even the most rate- value for money they represent, but also with the employer liability Paul Avis, Canada Life driven product, group life, may how they help to mitigate risk. insurers,” he says. “Group income offer added-value services, such To answer these questions, employers protection providers undertake vocational as bereavement counselling.” are turning to the HR analytics rehabilitation programmes to limit the duration But one area employers need to improve is community for relevant insights. This is of absence and would work with employers’ communicating and administering policies, achieved by simulating implications of occupational health providers and HR team. says Ellipse’s Ritchie. “A lot of [employers] risk incidents and the consequences for “The aim is to reduce unnecessary absence, provide good life cover but don’t tell people risk-related premiums. thereby limiting employers’ occupational sick how much they’ve got, and they don’t maintain The key is to analyse workforce data pay liability and, most importantly, returning the nomination of benefi ciary process,” he says. from three perspectives: behavioural, valuable employees to the workplace.” “We often fi nd we are ready to pay but the fi nancial and performance. Behavioural Katharine Moxham, spokesperson at Grid, employer isn’t ready to receive.” risk could involve employees, what they do and how they deliver brand values. Financial risks can range from the cost CASE STUDY DPD of attrition to exposure to liabilities, such as fraudulent activity. Performance risk relates to whether staff provide the Responsibility for risk is divided level of output required to meet objectives, for example sales targets. Express parcel delivery Working alongside its Data analysed in these ways reveals business DPD, part of consultancy fi rm Lorica far more about a workforce and the Geopost, has traditionally Employee Benefi ts, DPD factors affecting it. Employers can then split its risk provisions into recently revisited this set-up, move from reactive to proactive two, with people-related with pensions auto- interventions, including benefi ts such as aspects sitting with HR, and enrolment looming. Under employee assistance programmes. travel policies, such as the new arrangement, only Ultimately, the aim is for employers to vehicle and accident existing scheme members understand what risks they could face insurance, handled by a will continue to receive and what benefi ts might reduce the corporate risk team. critical illness, and staff that Debbie Morey, had not joined the group likelihood of these happening. compensation and benefi ts pension plan were given a manager, says much of the fi nal chance to do so: they reason for this is historical, would receive life assurance Nick Martindale is a with critical illness and life but not critical illness. life assurance to those,” freelance journalist assurance coming under the “Those that decided not to says Morey. “Only new business’s group personal join when we staged went starters now get the option pension scheme, now into The People’s Pension of the Aegon scheme with provided by Aegon. scheme, and we don’t offer the life assurance.” @ Read also How to align group risk benefi ts with business strategy at bit.ly/1kd2kxU

36 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 36 16/04/2014 10:30 Employee beneﬁ ts. We’re more than qualiﬁ ed.

Operating for over 145 years Serving 90 million customers in over 45 Serving 91 of countries the top 100 Top 5 Fortune 500® employee companies beneﬁ ts provider in over 20 markets Number 1 life insurer in the US*

Enjoy the reassurance of working with an experienced employee beneﬁ ts provider – with award-winning service.**

As part of a leading international employee beneﬁ ts provider, MetLife Inc., we combine global experience with local know-how. Our UK experts work closely with colleagues worldwide to ensure we always deliver the right solutions, service and support – all of which are reﬂ ected in our 97% customer satisfaction rating† across over 6,800 schemes. For more on how we deliver world class solutions Call 0845 603 8899 or visit metlife.co.uk/atwork

*The #1 claims based on Life Gross Written Premium at the end of the year, as per Axco reports. **Awarded Company of the Year at the Financial Adviser Service Awards 2012 & 2010. †Taken from MetLife internal portfolio data, as at December 2013. Products and services are offered by MetLife Europe Limited which is an afﬁ liate of MetLife, Inc. and operates under the “MetLife” brand. MetLife Europe Limited (trading as MetLife) is authorised and regulated by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request. Registered address 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland. Registration number 415123. UK branch address: One Canada Square, Canary Wharf, London E14 5AA. Branch registration number BR008866. The Trustee of the MetLife Master Trust for the MetLife Registered Group Life Policy is Castlewood Trust Corporation Limited, a company incorporated in England with company number 4240495 whose registered ofﬁ ce is 9 Devonshire Square, London EC2M 4YF. www.metlife.co.uk © 2014 PNTS 1574/1 0214 EB

EB_0514 37 17/04/2014 14:37 COMMUNICATION

MOBILE PLATFORMS WILL MAKE WORKERS APPY More and more employees want to use mobile technology to access their beneﬁ ts and employers need to respond, says Robert Crawford

obile applications (apps) are to use mobile technology and apps. as smartphones and tablets. changing the face of fl exible and Edenred’s Benefi ts insight: trends for Alex Thurley-Ratcliff, innovation and voluntary benefi ts plans, but benefi ts in 2014 research, published in January, business development at Shilling, says: “More many employers are missing the found that just 14% of its employer and more benefi ts platforms and providers are opportunity to take full respondents ranked mobile channels as one of realising they have to offer mobile versions of Madvantage of this technology.. their three priorities in the year ahead. their sites to enable non-desk-based staff to Staff, both at work and in their personal lives, However, almost a quarter (23%) thought easily access their benefi ts and choices.” now expect to be able to get information and mobile channels represented an opportunity to Most benefi ts schemes can be accessed make decisions any time, anywhere. So the old drive increased take-up of benefi ts. online, but employers may spurn providers that static website approach to fl exible and Providers of fl exible and voluntary benefi ts do not also offer mobile technology. voluntary benefi ts is being challenged and are adapting their platforms to cater for the “Employers are asking providers: is it mobile employers need more from benefi ts platforms growing demand from employees to access ready?” says Thurley-Ratcliff. “If it’s not, then

Thinkstock to improve take-up. One way to achieve this is their beneﬁ ts through mobile devices, such that is one reason to look at other providers.”

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CASE STUDY NOTTINGHAM CITY TRANSPORT Flex portal can be used in transit Nottingham City Transport (NCT) a computer at work.” had a fl exible benefi ts portal in NCT provides real-time travel place for a number of years but information to its customers via struggled to get employee buy-in mobile phone apps, so it wanted and take-up remained low. to do something similar to give In April 2014, the organisation staff instant access to their launched a bespoke fl ex portal benefi ts to improve engagement with provider Personal Group, and and take-up, says Leafe. used technology to enable “We used to have a basic employees to sign up using scheme,” he says. “Something mobile devices. that did not associate with the More than 200 employees organisation. It is now more registered on the portal using personal and direct and looks like their mobile devices, taking up an NCT website. Now staff can benefi ts such as discounts on get instant access because we holidays and various insurances. have allowed the use of mobile change the way we approach and statements, and will now do Mick Leafe, HR director at NCT, technology on our portal.” communications,” says Leafe. the same for our benefi ts. says: “Employees might have used Mobile technology has also “In the past, we have not had a “I am certain mobile their smartphone or tablet device, helped shape the way NCT good experience with trying to technology will increase the which is really interesting to see. communicates benefi ts to its get ahead. overall notice paid to our benefi ts The response of the launch has staff. However, its use of DVDs “We previously relied on and the ultimate thing is been encouraging because many has not had the desired impact. technology to send out our terms engagement. Mobile technology of our staff do not have access to “Mobile technology has helped and conditions, business plans has helped greatly with that.”

IF YOU READ NOTHING ELSE, introduced smartphone technology for its desire to access their benefi ts from a range of READ THIS. . . guards and drivers, who need up-to-date devices, including their offi ce computer, home operational information. The smartphones can computer and mobile devices. > Flexible and voluntary benefi ts providers also be used to send SMS text messages about Ali Lanning, head of customer experience at are changing the way their platforms benefi ts and reward developments. Benefex, says: “We are moving to a more adapt to mobile technology and apps. Matt Duffy, head of online consultancy at personalised approach to benefi ts and that Lorica Employee Benefi ts, says: “Employers seems to be the case in the on-demand world. > Mobile technology is affecting the way need to look at mobile technology as a “Employees don’t want to have one annual benefi ts choices are made. necessity to deliver benefi ts. Flexible and enrolment window; they want to be able to voluntary platforms have to be able to adapt choose benefi ts at any time and anywhere, on > Social media-based functionality helps communication to employees. and transact with mobile devices.” the bus, the train or at home on different As regards fl ex, mobile technology could devices. Mobile technology can aid that.” > App notifi cations can help drive affect the way benefi ts are chosen. For Being able to communicate with staff in benefi ts engagement. example, many employers want to allow staff more fl exible ways is also a requirement for to access and renew benefi ts at any time, employers with diverse workforces, either which would mean scrapping the annual fl ex spread out geographically or with assorted age But this trend is more evolution than enrolment window. and gender profi les. revolution. According to the Employee Technology has evolved considerably in Mobile apps that use notifi cations are a Benefi ts/Towers Watson Flexible benefi ts response to this demand, as well as employees’ prime example of how employers can improve research 2014, published in April, online portals communication, especially when an enrolment are the most common (83%) method of window is open, when a benefi t has just been communicating fl ex schemes. However, only introduced, or when new savings are being 5% of respondents currently use mobile apps. offered through a voluntary benefi ts platform. Employers are being challenged to prioritise Employees don’t want an David Walker, commercial director at the demand for mobile-enabled platforms so annual enrolment window; Personal Group, says: “Employers need an app. they can boost employee engagement. they want to be able to It provides a rich opportunity to communicate East Coast Mainline is one example. It has messages, but email is still the default. more than 3,000 employees spread between choose benefi ts at any time” “Expectation levels have grown that mobile Inverness and London, and in September 2013 Ali Lanning, Benefex technology will work, but if employers can be a

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EB_0514 039 16/04/2014 10:54 COMMUNICATION

The digital life: how people use smartphones 59% Viewpoint 63% update social use navigation networking sites or maps 1 in 4 update social networking sites daily Dr Angela Wright is a senior lecturer in human resource management 70% 51% at Westminster search for use online information banking Business School Using technology can add fl exibility and value 57% 46% search for product search/use Allowing individuals a choice in selecting information online vouchers and structuring their benefi ts packages has been made much more feasible by changes in information technology. But this revolution in means of 32% communication has not necessarily been matched by an increase in 50% play online buy goods games communication by organisations to their employees with regard to their reward packages. There is evidence that although choice in benefi ts is desired by 34% employees, this remains a 42% stream buy services music communications challenge for employers and is not standard practice in many organisations, which tend to Source: Deloitte prefer more standardised packages. little bit smarter, then tailored messages could Mercer, says employers could be restricted in Employers’ main motive in using be sent using smartphones or an app. This will how much information they can send through benefi ts fl exibility is to respond to drive take-up of benefi ts.” mobile technology. “There is a restriction on employees’ different interests or values, Lorica’s Duffy says a good mobile smaller devices on the amount of information recognise their diverse lifestyles, and experience is needed to support choice that can be sent through,” she says. “Staff do promote understanding about benefi ts. in voluntary and fl exible benefi ts. not want to be overloaded, but there are all But the limited progress of fl exible “The ability to engage and sorts of things they need to be aware of benefi ts could indicate the absence of a communicate with in making benefi ts decisions, such as general tendency for UK organisations employees in an online format terms and conditions.” to offer tailored reward packages in outside the workplace is important However, as providers move response to different employee values. to increase engagement,” he says. to accommodate mobile However, the potential of new media “Mobile technology can do that.” technology, employers to facilitate greater individual fl exibility The biggest development in the past really should take full may be just what is needed to enable year has been platform providers’ use of advantage. Thurley-Ratcliff this more employee-centred approach social media-based functionality. For example, adds: “Mobiles are the new personal to benefi ts, rather than a more formulaic some platforms are using Facebook-style computer. It’s the way most people interact and standardised approach. pages that enable staff to ‘like’ benefi ts and with their world and benefi ts needs to be a Employers that can use technology to view their peers’ perks preferences. part of that interaction.” the greatest real communication effect Walker says: “There is an opportunity for may gain greater perceived employee organisations to create Facebook-style media value from their benefi ts spend and platforms to allow employees to communicate Robert Crawford reward packages. is a reporter at with each other and send gifts, but this is seen This could aid their cost- Employee Benefi ts more in the reward and recognition area. It is a competitiveness in a labour market that trend that will grow for the foreseeable future looks set to become much more as the capability of mobile devices increases.” @ Read also Mobile-based benefi ts communication competitive in the near future. on the rise at bit.ly/Mu90va But Kim Honess, head of fl exible benefi ts at

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EB_0514 040 16/04/2014 10:54 Including friends and family discounts

EB_0514 41 28/04/2014 16:01 EB_0514 42 16/04/2014 12:18 EB_0514 43 16/04/2014 12:19 INTERNATIONAL GLOBAL AUDIT MUST ADD UP A global beneﬁ ts audit is a common feature of employers’ spring cleaning, says Clare Bettelley

he most common driver behind a local legislation, whether they are totally global audit is an employer’s desire to adapted to it and whether employers are assess the consistency of its benefi ts meeting all their social security contribution package across the countries in requirements. And in terms of competitiveness, which it operates, and how well its how do they rank? Can they attract and retain Toffering meets local statutory requirements. valuable staff with the plan they are offering?” Karen Gamble, head of client relations at the Willis measures how an employer is Health Claims Bureau, says: “Employers are fi nancing its benefi ts in order to assess the looking at what future legislation will require cost-effectiveness of its package, and and making sure they have got a process and considers whether there are effi ciencies to be system in place so that when staff move made, perhaps by using global services such as from, say, India to Brazil and Brazil to the multinational pooling. Netherlands, that they meet the statutory Cultural appropriateness is measured on the requirements and expectations.” basis of how an employer’s benefi ts rank against its competitors’ offerings. “An Four measures employer’s benefi ts may all look really good, traffi c light-based system which fl ags up in red Compliance is one of four measures but is it really necessary to offer staff four- any benefi ts that require urgent attention. underpinning the framework that global times life cover, which is typical in the UK?” Employers must fi rst fully understand their benefi ts adviser Willis uses to help employers says Gistelinck. “In Belgium or Denmark, life or motivations for conducting a global audit, perform a global audit. The other three are death cover is already included in an identify their objectives and communicate competitiveness, cost-effectiveness and employee’s retirement package.” them to staff and all relevant stakeholders. cultural appropriateness. Whichever framework an employer uses, it Gamble says: “Global compensation and Dieter Gistelinck, development leader at must have an appropriate central platform to benefi ts managers have got to look at what Willis, says: “We call it the four C methodology. store and analyse the data collected through they are trying to deliver at the end of the day.” In terms of compliance, we look at whether all the audit, to help determine which benefi ts The last thing organisations want to do is local benefi ts plans are in line with statutory require attention. For example, Willis has a create unnecessary unrest in their workforce

Global beneﬁ ts audit timeline Source: Willis Employee Beneﬁ ts Month 1 Month 2 Months 3-4 Month 5

Establish contact Data collection Analysis Strategy Implementation I I Company internal I Collect data from I Compare benefi t I Full appraisal of Corporate communication insurers/copy of structure/compliance existing benefi ts communication about guidelines about project plans from employer’s I Benchmark I Recommendations for I subsidiaries I Specifi cation to Local contact details I Identify deadlines country-specifi c issues insurers I I Defi ne strategy and Prepare priority list I priority with the Analyse quotations I Prepare overview organisation received I Populate online tool I I Recommendation for Prepare renewal I Pooling feasibility multinational pooling report study

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EB_0514 044 15/04/2014 12:36 @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/international

IF YOU READ NOTHING ELSE, READ THIS. . .

> Employers must decide their objectives before embarking on a global audit.

> A communication strategy must clearly explain the purpose of the audit and what it entails for all relevant stakeholders.

> Tracking global staff can be challenging, and larger employers sometimes write off the extra expense in beneﬁ ts.

employees that fall within its criteria, whether it is staff that work in a particular country or those that have a specifi c benefi t that is being audited. This is why local stakeholder buy-in is key. Gistelinck says: “If somebody withholds information locally, the audit would have missed a certain population or contract.” However, losing track of employees is a common problem for global employers, and a sensitive issue to confront. Global benefi ts managers have got to look at what Lost track of staff The Health Claims Bureau’s Gamble says: “It’s they are trying to deliver” absolutely bonkers, but we’ve come across it Karen Gamble, Health Claims Bureau time and time again. One employer I worked with merged with another and had done so many joint ventures over the years that it had that may, ultimately, harm the results of a A global audit enables employers to create a lost track of the staff it had.” project which, for larger employers, may cost coherent policy that enables them to recruit Some employers are more inclined to write hundreds of thousands of pounds to undertake. new staff onto the same level of benefi ts as off a benefi ts expense than conduct a global The cost of a global audit will depend on its their predecessors and existing peers. They audit, she adds. “It’s normally the wealthier scope, in terms of the number of benefi ts the must also get buy-in from local stakeholders to employers that are the worst at this, because employer plans to cover, and the range of maximise the success of the audit. it’s easier to write a cheque for, say, £500,000 countries under review. Gistelinck says: “Employers can get buy-in by than it is to spend the money on an audit.” explaining that they are doing the audit to make Gamble advises employers that are not in a Cost of an audit sure their benefi t plans locally are aligned with position to do this to begin by assessing the Gamble says employers can expect to pay their global philosophy on benefi ts, and that social security in the country being audited. between £2,000 and £5,000 per country to they’re doing this for the right cause: not to cut “Nearly every country has some basic provision audit developed countries, such as the US, benefi ts, just to make sure they effi ciently and a recording mechanism,” she says. Australia and most of Europe, and between fi nance the local design of the plans, and “Employers must request information. It’s slow, £5,000 and £10,000 per country for less remain competitive and attractive for staff.” it’s grinding and it’s not accurate, but it’s a start.” developed regions, such as South America, Communication programmes that clearly Willis’ Gistelinck says employers could India and South Africa. explain the scope of the audit, including which concentrate on what they know. “They may Gamble insists the cost is worthwhile, benefi ts will be included and the objectives of know 95% of their staff are in 40 countries, so despite comparing the task to repairing the the project, will help to secure buy-in from all they could focus on those fi rst,” he says UK’s M25 motorway, in that it is a never-ending stakeholders, including HR, fi nance, group risk project requiring continual renewal. and compliance and procurement staff. “That is a very fair analogy, but employers It is important for benefi ts packages to can at least end up with the knowledge that remain unchanged while the audit is taking Clare Bettelley is associate editor at when they are moving John Smith from Brazil place to optimise the accuracy of the project, Employee Benefi ts to India, from India to Australia and from but this can be a challenge for employers Australia to Angola, that they know what is facing a lengthy audit because of the multiple going to happen should he die, should he be countries in which they operate. @ Read also How to use employee benefi ts to underpin global expansion at bit.ly/1gQUoSs severely ill, or should he retire or leave them.” It is also crucial for an audit to track down all Thinkstock

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FUJITSU POWERFUL AT A GLANCE CONNECTION Focusing on staff needs brings IT giant Fujitsu a big payback in performance, says Jennifer Paterson

Fujitsu UK and Ireland is an information technology systems, services and products organisation. The UK and Ireland arm began as International Computers (ICL) in 1968. In 1990, the Japanese organisation Fujitsu, which has about 170,000 staff in more than 100 countries, acquired an 80% stake in ICL. In 1998, it became a wholly owned subsidiary and was known as Fujitsu ICL. The ICL name was dropped in 2002. In the UK and Ireland, Fujitsu employs just over 10,000 people across 250 sites. Its core sites have about 3,000 employees, with a similar number based at its larger client sites and the rest spread out across smaller client sites. The gender make-up of the workforce is 77% male and 23% female, which reﬂ ects the IT sector norm. Almost two-thirds of staff are aged between 40 and 59.

he UK and Ireland arm of global reduce their working hours for a small be successful, because they are not worrying information technology organisation reduction in pay. about things they do not need to worry about. Fujitsu is focused on tailoring its Evans adds: “It creates a bridge for them to “We have a good benefi ts package that benefi ts package to meet the needs think about what they want to do next in life, covers all the essentials for staff, but we’re also of both employees and the business. whether that is focusing on hobbies or leisure enabling them to choose other benefi ts, to TPaula Evans, head of pensions and benefi ts, time. It also enables us to reinvest in bringing really support their health and wellbeing and UK and Ireland at Fujitsu, says: “Our leadership new people into the business, so it helps us life within our organisation.” team gives us really clear direction on how we from a succession-planning point of view.” Employee choice is delivered through achieve through our employees. We have a Fujitsu’s fl exible benefi ts scheme, which clear focus around employees, customers and Flexible working includes private medical insurance, a health results. If we are delivering in those spaces, and Fujitsu’s other new policy is around fl exible cash plan, health screening, group risk benefi ts if we are looking after our employees, the working. Staff can now take up to four weeks’ and travel insurance. business will do well.” unpaid leave a year to manage their caring During its fl exible benefi ts enrolment David Brackwell, head of wellbeing and responsibilities. Brackwell says: “One thing that window each autumn, the organisation focuses inclusion, UK and Ireland at Fujitsu, adds: “There is becoming an increasing challenge for people on a few key benefi ts. In 2012 and 2013, it is a recognition that our benefi ts and our is caring responsibilities. People are often communicated the details of auto-enrolment. policies need to match up with what people presented with childcare and eldercare Fujitsu auto-enrolled its employees in June need. If we are responsive to people’s needs, problems, and it becomes a real issue.” 2013, but has continued to communicate to then that will play back into performance.” These new programmes trace back to the staff in the auto-enrolment section of its This philosophy is evident in two new organisation’s aim of being people-focused, trust-based defi ned contribution (DC) pension programmes Fujitsu has introduced this year. placing its staff at the heart of all it does. plan that they can move up to more generous The fi rst is a phased approach to retirement, “We need benefi ts that are aligned with contribution levels. which allows employees over the age of 55 to that,” says Evans. “That enables employees to Its main DC pension scheme provides

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EB_0514 46 15/04/2014 12:37 EMPLOYER PROFILE

double-matched Brackwell. “There was a lot contributions for staff, so BUSINESS ISSUES of stuff being done, but THE BENEFITS those who pay in 3% IMPACTING BENEFITS without great focus. It was receive 6% from Fujitsu, up gym discounts and fresh Pension G A challenging marketplace to a maximum employer fruit. It was great, but it was > A trust-based defi ned contribution (DC) created by the UK economy. contribution of 10%. activity without direction.” scheme with employer-matched G “The [organisation] is Ensuring it is able to deliver Fujitsu has now contributions up to a maximum of 10%. very much about choice, great-value products to customers. developed a cohesive > Defi ned benefi t (DB) plan selectively G rather than forcing A need to be truly consistent health and wellbeing open to new members. employees to do anything across the globe. package that focuses on they don’t want to do,” says health issues relevant to its Healthcare Evans. “When auto-enrolment came in, we workforce. The organisation’s top three health > Private medical insurance, for some staff were aware that quite a lot of employers in the concerns are musculoskeletal disorders, as core, others via fl ex. UK would be thinking about levelling down and cardiovascular disease and stress. > Health cash plan, available through fl ex. reducing contributions. “We have focused our activities on those > Dental cover, available through fl ex. Health screening, depending on staff “We thought that wouldn’t be responsible for areas,” says Brackwell. “With cardiovascular > grade and available via fl ex. us as an employer and it wouldn’t be doing the disease, we provide staff with information and right thing by our employees. We brought in an opportunities, for example asking: what are auto-enrolment minimum section in the plan, your personal health metrics, and what might Group risk so that if employees don’t choose to join the you do if you want to make changes? With > Life assurance for all employees. Additional life assurance and dependants’ main plan, for whatever reason, we will musculoskeletal, we manage issues as they are > life assurance available to pension scheme auto-enrol them, but at minimum levels.” presented, and I think we do that effectively.” members and through fl ex. Fujitsu formed a partnership with mental > Group income protection via pension Health fairs health charity Mind in 2013 and conducted scheme membership. Fujitsu also aligns its fl ex enrolment window some research across its workforce. In 2014, it > Critical illness and personal accident with on-site health fairs, which it has run for plans to implement recommendations from insurance available through fl ex. two years. To date, these events have included that report. Brackwell says: “There are a inviting its healthcare providers on site to number of things staff were looking for, such as Company cars provide information to employees, on-site peer support, information about the issue, and > Company cars for certain grades of staff. wellbeing kiosks and an on-site nurse. managers’ ability to access information. Those Brackwell says: “We also put in HR people things were coming through strongly and that Other benefi ts who had been briefed and understood the will be our plan for this year.” > Childcare vouchers. benefi ts. We have seen an increase in take-up > Bikes-for-work scheme. of health benefi ts. Is there a direct correlation? > Travel insurance, available through fl ex. I would like to think so.” Jennifer Paterson is senior reporter at > Holiday buy and sell, available via fl ex. Healthcare and wellbeing is an area that has Employee Benefi ts > Employee discounts scheme. grown in importance for Fujitsu in recent years. > Loans for staff to buy Fujitsu products. “If you go back two or three years, there was > Four weeks’ unpaid leave a year for the idea that wellbeing was something we @ Read also Fujitsu launches fl exible retirement at bit.ly/1evUE4x caring responsibilities. should have had on our agenda,” says

CAREER PROFILES

Paula Evans, consultant for consultancies such positively touched the lives of “My initial role was managing head of pensions as Hewitt Associates (now Aon 20,000 people, in terms of various health benefi ts, such as and benefi ts, UK Hewitt), HSBC Actuaries and pensioner members,” she says. private medical insurance and and Ireland, Consultants, Hymans Robertson “It improved benefi ts security.” occupational health, and health joined Fujitsu in and Watson Wyatt (now Towers and safety,” he says. May 2007. Watson). David Brackwell, Two years ago, Brackwell began “I joined to be In 2013, she was involved in head of to look after wellbeing, a remit the UK pensions manager, and reshaping three of Fujitsu’s fi nal wellbeing and that has since been broadened to over that time I have had salary pension plans, after the inclusion, UK and include diversity and inclusion. responsibility for various things, parent organisation invested Ireland at Fujitsu, “The wellbeing programme such as global mobility,” she says. £800 million into the UK business, has been with and the way we implement it is Before Evans moved to an which was invested in pensions. the organisation what I look on with the most pride in-house role, she was a pensions “It was something that for nearly six years. over the last few years,” he says.

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EB_0514 47 15/04/2014 12:37 EB_0514 48 25/04/2014 14:36 @ www.employeebeneﬁ ts.co.uk/resource-centre/buyers-guide BUYER’S GUIDE

PRODUCT FILE VOLUNTARY BENEFITS Off-the-shelf voluntary beneﬁ ts schemes give employers an easy way to offer staff discounts, says Robert Crawford

content, mean more benefi ts can be bundled into a single off-the- Thinkstock shelf platform and accessed in The facts various ways. This is especially useful for What is the benefi t? employers that have remote and Off-the-shelf voluntary benefi ts mobile employees, or staff that packages are ready-made have limited or no access to schemes that give staff access to computers. Also, smartphone retail offers and discounts via the applications can be downloaded, so internet, telephone or brochures. employees can access savings wherever they are. Where can employers get more For example, staff can log on to information? a portal from anywhere using their Visit the Employee Benefi ts voluntary benefi ts channel at mobile phone, read more about the bit.ly/1hdAbEq benefi ts on offer and then purchase them via their phone, Who are the main providers? ring the provider or print out a ACE European Group, Allsave, voucher to use in stores. Edenred, Fair Care, LogBuy, Love2reward, Next Jump, Quick-response code PeopleValue, Personal Group, Most high-street stores now also P&MM Employee Benefi ts, Reward accept a quick-response (QR) code, Gateway, Sodexo Motivation which can be shown and scanned Solutions, Stormchild Ventures, with a mobile device. Vebnet, Wider Plan and Xexec. Benefi ts providers say mobile logins now account for most mployers use off-the-shelf branded with an employer’s logo, employee traffi c on voluntary well as helping employees voluntary benefi ts packages but will otherwise be fairly generic. benefi ts websites. understand the scheme’s features. to enable staff to buy a wide Popular voluntary benefi ts range An emerging trend in voluntary Voluntary benefi ts schemes are Erange of discounted from high-street discount benefi ts platforms is the increasing popular with organisations that services and products. Although vouchers to holidays, gym number of programmes offering have a broad staff demographic off-the-shelf packages are more discounts and family days out. cashback on purchases. So because of the variety of discounts mass-market and less tailored to Employee Benefi ts’ Benefi ts employers could review their and offers that can be included. individual workforces than a Research 2014, published in May existing voluntary benefi ts package Costs to set up a voluntary bespoke package would be, the 2014, found that gym membership and re-energise it by including benefi ts scheme vary between ready-made versions are an easy (cited by 34% of respondents) and cashback offers. providers and packages, but option for employers of all sizes. retail discounts (33%) are the Prepaid cashback card schemes usually depend on the number of They use web portals that offer most popular benefi ts offered in a can allow staff to save up to 10% employees involved. The market employees savings from deals and voluntary scheme. on their normal expenditure. has seen off-the-shelf packages discounts on services and New technology, such as mobile Some voluntary benefi ts portals ranging from entry-level schemes products. Schemes will typically be web-enabled and app-based will credit the cashback to the with no set-up fees through to user’s account, and this can be put those with fees ranging from STATISTICS towards further purchases or £1,000 to £3,000 a year, as well as taken out as cash. costs per head as low as £1 to £10 of employers offer voluntary benefi ts Providers can help employers a year per employee. 73% (Employee Benefi ts’ Benefi ts Research, published May 2014) launch a scheme and provide communications, such as emails or of respondents offer retail and leisure discounts @ booklets, that can be sent to staff Read also Met Police launches 33% (Employee Benefi ts’ Benefi ts Research, published May 2014) voluntary perks at: bit.ly/1lZOuia detailing the benefi ts on offer, as

www.employeebeneﬁ ts.co.uk I May 2014 I 49

EB_0515 49 15/04/2014 13:59 INDUSTRY FORUM @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/pensions

Pension changes will Supplied by: have positive impact

Changes to the pension landscape announced in the Budget 2014 should encourage staff to take more interest in their retirement income, but ﬁ nancial education is needed, says Dale Critchley

When Chancellor George Osborne delivered his different times, and that, irrespective of the 2014 Budget, he said it was a Budget for changes, the fi nal value of the pension pot “makers, doers and savers”. For the latter, this depends on exactly the same factors. In many meant a number of changes, including plans to cases, this will still not be enough. provide people with more fl exibility on how Savers will also need to think more closely they take an income in retirement. about their investment choices. In particular, So what does this watershed moment mean staff may decide to take their benefi ts at for the future of workplace pensions? There is different times, in some cases later than little doubt that for staff, coming so soon after originally anticipated. For these people, auto-enrolment, it is another positive. But what investment options built around buying an about the possible benefi ts for employers? annuity at age 68 will no longer be appropriate. Despite this, we expect annuities to remain Common threads popular for those who want a guaranteed There are two themes running through the income. Meanwhile, default investment funds recent reforms. First is giving people more will, in the future, need to cater for a more fl exibility and choice when it comes to taking saving. More choice at retirement, a lower rate diverse range of at-retirement decisions. their benefi ts. Second is the expectation that of tax on withdrawals, the ‘guidance guarantee’ people take more responsibility for their future. and assurance that charges will be capped at a Blurred lines This starts with auto-enrolment reducing some sensible level should help improve perceptions. Just as the choices broaden for people when of the burden from the state. It ends with This is positive news for good-quality they retire, we also believe the lines between educating people, once they stop working, to pension schemes. If employees warm to the workplace pensions and other savings manage their money effectively. broadening appeal of pensions, an employer products could blur. More synergy between All these changes should chip away at the can expect a better return on its investment. individual savings accounts (Isas) could be reluctance some people have towards pension But, while many people will embrace the seen, with people rolling money over from the changes, there are points of caution. Research former to the latter. BUDGET CHANGES from New Zealand’s KiwiSaver found that one Against this backdrop, the relevance of AT A GLANCE of the causes of opt-outs was persistent corporate platforms (or wraps) is also more tinkering with legislation and little confi dence apparent. Under a platform, access to a I People will be able to withdraw from among savers that existing benefi ts would pension, other savings products and fi nancial their defi ned contribution (DC) pension continue. Belief will come from giving these education are available to staff online, in one savings without restriction from age 55, rising to 57 in 2028. reforms time to settle. In the meantime, place. What is certain is that with the landscape fi nancial education will be imperative to help shifting, employers will need workplace I Withdrawals will be subject to the staff make sense of the changing landscape. benefi ts options that can keep pace with the individual’s marginal rate of income speed of change. tax, rather than the prohibitive 55% that currently exists. Incidental changes While education and guidance remain crucial to Dale Critchley I Every person with a DC pension will be the future success of workplace pensions, the is technical reform manager at given free, impartial, face-to-face guidance on retirement choices. approach will need to evolve. Key to this will be Friends Life refl ecting the fact that income can be taken at

50 I MonthMay 2014 2012 I www.employeebeneﬁI www.employeebeneﬁ ts.co.uk ts.co.uk

EB_0514 50 15/04/2014 15:30 @ www.employeebeneﬁ ts.co.uk/resource-centre/buyers-guide BUYER’S GUIDE

PRODUCT FILE

CONTRACT-BASED DC The facts What is a contract-based deﬁ ned contribution (DC) pension scheme? PENSION SCHEMES A contract-based DC scheme is Pension reforms have made DC schemes a hot topic for employers, says Ceri Jones based on contributions from both employers and staff. It can be a group personal pension (GPP), a stakeholder scheme or a group self-invested personal pension (Sipp).

What are the origins of contract-based DC pensions? GPPs were introduced in 1988, followed by stakeholder pensions in April 2001, speciﬁ cally aimed at staff on low incomes. These plans succeeded in driving down charges, but have since fallen out of fashion.

Where can employers get more information and advice? The Pensions Regulator on 0845 600 1011 or www. thepensionsregulator.gov.uk The Society of Pension Consultants on 020 7353 1688 or www. thesocietyofpensionconsultants. he Defi ned contribution recommending a cap on scheme the National Association of Pension co.uk workplace pension market charges, but pensions minister Funds (NAPF), which have been The Pensions Advisory Service study, published by the Steve Webb is keen to impose highly critical of traditional pension on 0845 601 2923 or www. TOffi ce of Fair Trading (OFT) some sort of ceiling. In March 2014, charges, have highlighted the pensionsadvisoryservice.org.uk in September 2013, was critical of the government announced a cap benefi ts of master trusts, which contract-based pensions at a time of 0.75% for default investment are cheaper and offer economies What are the costs involved? when auto-enrolment is requiring funds in auto-enrolment schemes of scale, and there has been some An annual management charge, employers to arrange new pension to apply from April 2015. traction in these arrangements. typically between 0.4% and schemes for most of their staff. One concern about auto- 0.7%, is applied to members’ The OFT’s probe identifi ed about Lose £170,000 enrolment is that pension plans are funds, with a lower charge for £30 billion of savings in pre-2001 According to government fi gures, individually priced depending on passive funds. In March 2014, the pension schemes that may not be an employee who saves £100 a employee numbers, contributions government announced a 0.75% charges cap for workplace achieving value for money month over a typical working life of and staff turnover, so some small pensions. Under auto-enrolment, compared with more recent plans, 46 years could lose almost employers will be denied access to contribution levels will rise £170,000 from their pension pot that tend to have lower charges. schemes other than the National incrementally and the full The investigation is critical with a 1% charge and more than Employment Savings Trust (Nest), employer contributions of 3% of because, by 2018, up to nine £230,000 with a 1.5% charge. which is mandated to offer terms banded earnings will not have to million workers will be There is also speculation that to any employer that applies. be paid until October 2018. automatically enrolled into a pension fund managers will be Providers fought for business defi ned contribution (DC) scheme. forced to disclose all their charges, The Association of British Insurers following a campaign by former STATISTIC (ABI) and its members have agreed Tory Chancellor Lord Lawson, who to undertake an audit of these believes compulsory disclosure will of small employers said they would wait as long as possible schemes and report into an go a long way towards removing 41% before thinking about how to comply with auto-enrolment. (Employers’ awareness, understanding and activity relating to workplace pension reforms, Independent Project Board. excessive charging in this market. The Pensions Regulator, spring 2013)

Thinkstock The OFT stopped short of Politicians and groups such as

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EB_0514 51 15/04/2014 15:31 BUYER’SS GUGUIDEIDE

PRODUCT FILE

from big employers,yers, with staging pensionspensions announced in the 2014 dates at the beginninginning of ththee Budget include the proposalprop that The facts auto-enrolment process, because from April 2015, people will still be large-scale schemes are more able to take a tax-free lump sum of profi table and also to build a up to 25% of the value of the What are the legal critical mass in the market. But pensions pot (as per current rules), implications? providers are less keen to take on however any cash taken over the Employers are obliged to put an employers with itinerant workers 25% tax-free amount will be taxed auto-enrolment scheme in place by their staging date, although or those with poor record-keeping. at the person’s marginal tax rate they can request a delay. Employers with existing pension and no longer at 55%. schemes are even fi nding that Also, from 27 March 2014, the What are the tax issues? their provider may not want to amount a member can draw down Tax breaks are available to both open up the scheme to all staff or each year will increase from 120% employers and employees. If want to set up a new scheme that are well served by basic to 150% of an equivalent annuity staff pay above the basic rate of specifi cally for auto-enrolment. diversifi ed investment strategies. (that is, the amount an annuity tax, they have to claim additional About 44,500 medium-sized Some advisers have been would have paid out in that year). tax relief via their tax return. employers will be required to have devising a multitude of fund blends To be allowed to ‘drawdown’ from a schemes in place this year, which and suggesting different blends pension, DC members must earn What is the annual spend on itself will need a lot of capacity, but and strategies for similar clients. It at least £12,000 a year. This is contract-based DC schemes? the numbers are set to rise is certainly more of struggle for down from the current £20,000 a According to the Association of sharply: about 450,000 consultants to make money on the year income limit. British Insurers, single premium organisations will be required to DC side than it was with defi ned pensions business was worth £32.1 billion in 2012, an increase comply in 2016, and 850,000 the benefi t (DB) schemes. Strong propositions of 3% from £31.1 billion in 2011, year after. At least 12 months of Providers are also developing Providers that are currently doing while regular premium pensions planning is required ahead of stronger governance around their particularly well in contract-based business was £4.3 billion, down staging dates to beat the rush. schemes, partly as a response to selection exercises are Legal and 1.4% from £4.4 billion in 2011. increasing scrutiny by The General, Fidelity and Zurich, which Clear commitment Pensions Regulator. are seen as having strong Which providers have the Those employers with a choice will Today, there is much greater propositions and an ability to biggest market share? want to select a provider that has a awareness about the importance implement schemes during a Providers are having no diffi culty clear commitment to this market, of choices such as annuity or period when other providers are in attracting business: the experienced staff who can support drawdown at the point of distracted by auto-enrolment. supply/demand dynamics are a complex implementation and retirement, and some providers Legal and General and The actually the other way. Aegon, future projects, and effi cient offer an annuity support service People’s Pension seem to be Aviva, Fidelity, Friends Life, administrative capability. and access to secure modelling picking up a lot of the ‘low-quality’ HSBC, Legal and General, Pension providers have tried to websites to help members think end of the market: schemes with MetLife, Prudential, Scottish Life, make themselves attractive to about their retirement income. many employees but low earnings Scottish Widows, Standard Life and Zurich Life are all big larger, more profi table, employers Under measures announced by and high turnover. Hargreaves players. Then there is the with improved communication Chancellor George Osborne in the Lansdown is also doing quite well National Employment Savings around the funds on offer, in 2014 Budget, from April 2015, with its corporate wrap, attracting Trust (Nest), where the limit on particular tailoring default funds to pension scheme members will no £511 million worth of assets under annual contributions and the the scheme membership. longer have to convert their pot management by the end of restrictions on transfers into and However, a high level of bespoke into an annuity at retirement, but December 2013, up from £222 out have damaged take-up, tinkering is open to criticism that it will have the choice of taking their million a year before. although that is partly offset by is a device to keep consultants and pension wealth as a lump sum, its hub, which appeals to smaller advisers in business, because most drawdown or as an annuity. @ Read What employers should know employers by semi-automating about DC governance at bit.ly/1hHoQzA staff fi t into just a few risk profi les Other measures impacting DC many auto-enrolment processes.

Which providers have STATISTICS increased their market share? More large (62%) and medium- 52% of medium-sized employers, of respondents that Legal and General is said to be gaining employer clients fast, sized (52%) employers felt the 65% of smaller employers and had not been auto- 64% while in February Standard Life auto-enrolment process would take 59% of micro employers indicated enrolled and had decided what to said that auto-enrolment had four months or longer than those an aim to obtain external advice. do said they would stay in the plan. helped it to secure more than who said so in autumn 2012 (49% (Employers’ awareness, understanding and activity relating to workplace pension (Workplace pensions survey, National 340,000 new customers and 43%, respectively). reforms, The Pensions Regulator, spring 2013) Association of Pension Funds, spring 2013) during the year.

52 I May 2014 I www.employeebeneﬁ ts.co.uk

EB_0514 52 15/04/2014 15:31 CONTACT DIRECTORY

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EB_0514 53 25/04/2014 10:48 CONFESSIONS OF A BENEFITS MANAGER Superman ﬂ ies in Candid desperately needs a new laptop and pays a visit to the IT department, where she unexpectedly ﬁ nds help from a superhero

his is it. I have had enough. I surprised to note that all T-shirts After a nice relaxing lunch, I venture the shared drive, and put all my cannot work with this fat, sport pithy comments about upstairs to fi nd a beaming Clark private stuff onto a fl ash drive. Then Tgrumbling lump of uselessness various science fi ction characters, Kent. He tells me, rather proudly, I take the laptop home and drop it any more. No, I don’t mean my to whom the wearer bears an that the machine now boots up in several times on my concrete back colleague Lazy Susan, at least not alarming resemblance. I guess it is a just under fi ve minutes. Yippee. Five step, aiming carefully for the spot this time. I mean my laptop. sort of unoffi cial uniform. Despite minutes is still interminable to Clark had pointed out. After that, it Let me tell you what is wrong their wizened, hobbit-like features, someone with a Macbook at home. won’t even power on. Brilliant. with it. The battery no longer holds the guys all look about 12. I give him my best smile, Back at work, Clark hands me a a charge for more than 30 seconds, There is one quite cute guy, explaining that I can’t go on carrying shiny new ultra-slim ultra-light so, in a meeting room, I have to sit though. He has dark hair in a sort of that brick around; I am getting a bad laptop, happily declaring that wherever my power cable will Clark Kent quiff, and piercing blue back. He is very sorry, and he really accidents will happen. reach, even if that is in a corner on eyes. His T-shirt is clean and refers looks like he is, as he repeats that Mind you, we do fi nd ways to my own. My laptop, a computing to the sex life of a superhero. I go they are not allowed to give out a bend the rules in HR. I have been antique, is as thick as a brick and as straight up to him and ask for a new new one until the old one is known to tip off a manager on how heavy as three. Worst of all, it takes laptop. Despite the fact he is sat completely, er, fi nished. However, he to redistribute his merit budget so half an hour (half an hour!) to power behind teetering says, looking me as to reward his favourites and still up these days. piles of new shiny meaningfully in the not go over the limit. Big Bad Boss I bring the subject up in my next laptops, he says they I take the eye, if I were to drop is a master of recharging costs to one-to-one with Big Bad Boss. As are not allowed give it on the bottom other departments to avoid cost usual, he is loath to add any cost to out new ones until laptop home and edge, just where he centre overspending. our budget that would eat into his the old one is, er, drop it several is pointing, that Lazy Susan has broken new corporate lunches account, so he fi nished. times on my would probably be ground in avoiding work, to the sends me off to talk to the boys in That’s OK, mine is the end of it. point that people don’t even expect IT to see if they can fi x it. I am fi nished, I assure him, concrete step, I don’t really it from her any more. And Creepy annoyed because he has just and I describe the aiming for the understand. If he Caroline is queen of taking credit convinced someone he needs a symptoms of its wants to help me, he for other people’s work. But these company tablet for demonstrations. demise. He purses spot Clark had could just do nasty little cheats seem coarse and Demonstrations? The only thing he his lips rather cutely, pointed out” something technical demeaning compared to the lofty demonstrates is a bad temper. If we and pushes his heavy to render it useless Tolkien ideals upheld by my new were to demonstrate any of our glasses higher up his and be done with it. friend in IT. How refreshing. online tools, I’d have to do it anyway. nose. Inexplicably, I want to ruffl e Why not just scupper the damn Could one tempt a superhero to On my ancient laptop. Grr. his hair. He says he will see what he thing and give me a new one? Why a thank-you lunch, I wonder? I have I have to have a stiff coffee can do. I explain about the battery give me hints on how to do it? I a horrible feeling he would just say: before venturing upstairs, because and, quick as a fl ash, he fi nds a have to assume this is some sort of “Thank you, ma’am, but that it what going to IT is like walking onto the replacement battery in a drawer fair-play gaming approach to we are here for”, and fl y off into the set of the Muppets. Our IT people and inserts it. I explain about the corporate rules. If it is actually distance. Sigh. are either extraordinarily skinny, or booting-up time. He says he will run broken when he gets it, however Next time... Candid reviews fl exible very hairy and fat. They wear diagnostics and get back to me. deliberately, that’s OK. Such working. special T-shirts, which smell faintly It is nearly lunchtime, and there scruples are not found in HR. I take of musty water and rather more is not much I can do without a the laptop back disappointedly. strongly of underarms. If you could computer, so I head off to the high That evening, I make sure @ Read more Confessions at: bit.ly/RKlOt2 still read the text, you might be street for some coffee and sushi. everything important is copied to

Employee Benefi ts accepts no responsibility for loss or damage to material submitted for publication. Copyright Centaur Media plc. All rights reserved. Independent assurance by No part may be reproduced in any form without written permission of the publisher. Employee Benefi ts is published by Centaur Media plc., the UK’s premier PricewaterhouseCoopers LLP UK independent business publisher. For information about the range of products produced by Centaur, visit www.centaur.co.uk. The site contains details of Website Print audience audience vacancies at Centaur. You can subscribe online to Employee Benefi ts at www.centaursubs.co.uk. Subscriptions: 1 year: £92, 2 years: £168, 3 years: £205. 51,597 18,870 ISSN 1366-8722

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