Housing provider Hyde Group has set up a flexible, employee-designed system for scheme members to access their benefits, in a drive to retain and attract talent.
Sixty-nine per cent of employees logged onto the company’s iFlex system and made changes to their benefits during its month-long benefit selection window after its launch in November last year.
Sarah Bissell, reward specialist at the housing group, said the company would like to attract employees from outside the housing sector but cannot always match the salaries offered in other sectors.
“The real challenge for us was in the housing sector, it’s an increasingly competitive environment and we’re having to think differently about how we get the funding and talent to compete,” Bissell said.
The real challenge for us was in the housing sector... and we’re having to think differently about how we get the funding and talent to compete
Sarah Bissell, The Hyde Group
This drove the company to consult employees on developing a flexible benefits package. An employee survey found 71 per cent of workers believed the company’s pension scheme made them a more attractive employer.
Single login
Hyde involved its employees in designing the new benefit system. “We had a project team with a member of the business from every single division or subsidiary in the business,” said Bissell.
One of the key suggestions from employees was to use their company login to access the system so there would be no need for a new password.
Hyde kicked off auto-enrolment on November 1 2013. Following this and the launch of the iFlex system – where employees can make changes to their investment decisions – scheme membership has risen to 90 per cent from 50 per cent.
Saq Hussain, head of defined contribution consulting at PwC, said there had been a big change in the past six to 12 months in terms of employers introducing other savings vehicles to sit alongside their DC scheme, such as corporate Isas.
“Employers are realising that people through working life have different savings needs,” said Hussain.
Employees accessing a corporate Isa through their employer can benefit from an annual management charge that is half that found on the high street, added Hussain.
Hyde’s AE process
Employees were auto-enrolled into the DC section of the company’s scheme, which was established in 2004 after its defined benefit section closed to new members.
The scheme established an additional lifestyle fund for the purposes of auto-enrolment that is lower risk, consisting of a mix of equities, a diversified growth fund, bonds and gilts.
Members of the DC section prior to auto-enrolment had access to a lifestyle fund consisting of equities and a DGF, which derisks them into cash and bonds as they approach retirement.
Members can also self-select from a range of 12 funds.
The company is in discussions with trustees over how to restructure the scheme to account for additional flexibilities available to members post-Budget, such as drawdown.
Bissell said a decision will be made on this by December in time for the next member newsletter.
Currently members receive information from the scheme’s administrators, with information on the best-value annuities available to them eight months before retirement.
Hugh Nolan, chief actuary at consultancy JLT Employee Benefits, said the main advantage of providing good pension benefits is an employer is “making sure the money you have got is providing the benefits to people in the most tax-efficient way”.
Nolan said death-in-service benefits can also help demonstrate an employer’s paternalistic attitude towards employees, without proving too expensive.
