Howdens provides staff with valuable retirement-planning tools

Following a review of its pension scheme and a consultation in 2020, kitchen furniture manufacturer Howdens chose to close its defined benefit (DB) scheme in 2021. Alongside this, it improved its offer to employees through the defined contribution (DC) scheme, including increasing the core employer contributions significantly and introducing additional matched contributions up to 12%.

This was accompanied by a concerted communications drive, designed to improve understanding of pensions among its employees, boost appreciation of the enhanced employer contribution and ensure staff were fully engaged in their own retirement planning.

The organisation runs regular sessions with employees, both in-person or online. Nilam Gardiner, pensions specialist at Howdens, says: “We have people who come time and again and there’s always more to tell them.”

It also makes use of newsmails, an intranet site and posters to highlight particular initiatives. “A recent campaign was to highlight that we allow people to make a nil contribution and still receive the 8% employer contribution,” she explains.

Around half of employees who are not automatically enrolled due to not meeting the age or minimum income thresholds choose to do so, she adds. In all, around 10,700 employees from a total workforce of 11,500 are in the company pension scheme.

Employees can access a contribution tool through Howdens’ benefits hub, which allows them to see the impact of increasing their own pension payments. “It might not be as expensive as they think, because they benefit from tax and [national insurance] relief using salary sacrifice, and they can also benefit from additional matching contributions from the company,” says Gardiner.

Those who are closer to retirement can take part in at-retirement workshops and webinars put on by the organisation’s pension provider, Standard Life. “The focus is on getting people to understand what their pension pot might look like when they get to retirement, and to think about whether they’re on track to meet the kind of retirement they’re hoping for,” says Gardiner.

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Employees can access a retirement income tool within Standard Life’s app, she adds. They can also request personal sessions to discuss their retirement options with Howden’s pensions team, which directs them to other sources of information such as Pension Wise.

Howdens has not analysed the impact of its pension provisions on recruitment or retention, but anecdotally has heard this is a factor in both people deciding to join and then remaining with the business, says Gardiner.