In October 2022, professional services firm Deloitte introduced a flexible pension policy that gave its 22,000 UK employees more control over their finances, while still centring the importance of retirement savings.
The policy allows staff to receive a cash payment in place of their pension contributions, in order to help people meet immediate financial needs.
However, rather than simply facilitating large numbers of opt-outs, the new policy was designed to be proactive and education-focused.
Will Aitken, director at Deloitte, says: “Deloitte’s people now have the opportunity to take even greater control over their finances. We deliberately structured the new policy to be more ‘pro pensions’ than it was.
"Whereas previously people opted out and stayed out of pensions for three years, now we automatically enrol them back into pension annually – although they have still the option to opt out again.”
In order to ensure employees are making educated decisions about their future finances, Deloitte also provides pension modelling tools. Rather than leading people to disengage from their retirement savings, the business has in fact boosted employees’ understanding and engagement.
“We think it is important that people make these decisions with as clear a picture as possible of the implications of their choices,” Aitken explains. “Before we introduced pensions flexibility, people could simply opt out of pensions without really understanding what it was they were giving up.
“Now we have a modeller that clearly shows how much money they can receive from receiving their employer contributions in cash, but also how much of an impact it could have on their future pension.”
The flexible pension scheme forms one part of Deloitte’s wider approach to choice, flexibility and employee wellbeing. As a whole, the firm aims to cater for a diverse workforce with a wide variety of needs and situations.
“We’ve conducted market research into employee preferences and found that not everyone places the same emphasis on pension saving against other financial priorities,” Aitken concludes. “Many have valid reasons for choosing not to save into a pension.
"Our new approach is more inclusive, because it caters for all these concerns rather than assuming everyone wants and needs the same thing.”
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How to implement flexible pension policies