The publisher has offered enhanced contribution rates to improve performance and minimise risk of scheme member dissatisfaction
Members of the publisher’s 1,473-strong scheme who contribute 3 per cent or more have been offered matching or enhanced contributions.
Why increase contributions?
Schemes providing enhanced contributions can:
Improve performance by promoting member satisfaction;
Reduce the risk of legal action at a later date by members; and
Minimise the cost and inconvenience of an aged workforce.
The changes, all introduced on a voluntary basis, were part of a review that started in 2010 and finished in April 2012.
Schemes that increase the total contributions into members' retirement pots boost members' chances of achieving a higher retirement income.
Nita Tinn, director at ITS trustees, said: "The biggest single factor in having a sufficient income in retirement is the amount of contributions given."
Reed Elsevier's review
The enhanced contributions were introduced in stages during the course of three years from 2010.
In 2010, the publisher matched contributions of up to 5 per cent for the member’s first three years of employment.
From 2011, a member's 6 per cent was added to 9 per cent from the employer if they had at least three years' service.
In April 2012, the employer improved this to a maximum of 11 per cent contribution for the member's 7 per cent.
Schemes should see if the employer or the scheme has the responsibility to change the rules
Matthew Swynnerton, DLA Piper
Reed Elsevier said the increase in contributions was initiated by the employer to promote member satisfaction.
"Changes were communicated through normal online and emails to the members," a spokesperson said.
An ageing workforce unable to afford to retire could present the employer with difficulties.
Tinn added that a workforce able to retire when it wanted would often be desirable for the employer, as members would be less dependent on the company at retirement age.
Schemes might need to check the power of amendment section in their trust deed and rules to see how contribution changes should be made.
Matthew Swynnerton, partner at DLA Piper, said: "Schemes should see if the employer or the scheme has the responsibility to change the rules."
Promoting satisfaction
Clear communications around changes to employer contributions can be important if schemes want to ensure members take advantage of, and appreciate, the added benefits.
Use a flexible system such as a targeted email
George Marsh, JLT
"Such strength and commitment is wanting of a campaign in itself," said George Marsh, communications consultant at Jardine Lloyd Thompson.
Regular communications with members can help to prompt contribution changes and should stress the value of the contributions.
The method of communication could match what is usual for the scheme, such as through payslips or online portals.
Modelling the outcome and tailoring illustrations to each member's contribution rate and salary can also help spark interest and support for the changes.
Marsh said schemes should already know the member demographic and size to make sure communications are always appropriate to their audience.
Strategies such as poster campaigns, flyers or smartphone apps could be used depending on the type and size of scheme.
"Use a flexible system such as a targeted email primarily accompanied by ambient advertising," Marsh advised.
Pension focus groups and surgeries can also help the scheme meet, engage and communicate with members, especially if the scheme is geographically disparate.
