The mobile phone network O2 is making a number of changes to its pensions arrangements in response to pensions simplification, age discrimination legislation and the increasing diversity of its workforce.
It is allowing employees to stay on at work beyond the current retirement age of 60 years to 65 years. The telecoms company is also introducing flexible retirement, as part of the changes it is making in response to pensions tax simplification, so that staff who reach 60 years can draw on their pension and continue to work. Furthermore, it is lifting the 15% cap on contributions to its defined contribution (DC) scheme and its defined benefit (DB) pension plan, which is now closed to new members.
It has also introduced an ethical pension fund for both its DB and DC pension schemes so that Muslim staff can invest in a fund that is compliant with their religion. The company launched the HSBC Life Amanah Pension Fund option in January.
James Kirkland, pensions manager at O2, said: "The trustees recognise that O2 is a company with strengths in diversity. They felt they could offer this and it would be an improvement for some of our staff."
Although only a "handful" of its 11,000 employees have opted for the ethical fund so far, Kirkland said it was a step in the right direction.
Under Islamic law, investments in companies with income from alcohol, pork-related products, conventional financial services, insurance, gambling, tobacco, weapons and similar activities are prohibited. This makes many funds unsuitable for people of Islamic faith.
The HSBC fund tracks the Dow Jones Islamic market Titans Index.