Technology giant Siemens made extensive use of modelling tools last year when it moved from an array of final salary pension schemes to a defined contribution pension plan and took steps to standardise the way pension contributions were calculated.
The change affected around 6,000 of Siemens UK’s workforce, which numbers over 20,000 in total. Before bringing in the changes, the company held an extensive consultation process which involved roadshows, presentations, the distribution of printed literature and the provision of helplines, in order to explain the proposals to staff. As part of this, two modelling tools were provided for employees to see how the changes were likely to affect them.
The first illustrated how the changes would impact on employees’ take-home pay, and the second enabled them to project retirement benefits.
By making the modellers available on the intranet and internet, as well as emailing them out to some staff, it was ensured that as many employees as possible could access the tools.
These devices helped employees make a decision about the exact level of pension contributions they wanted to make for the following 12 months, at the end of which a further choice would be made.
Ian Howard, director of corporate pensions, says: “You couldn’t have answered the ‘what does it mean to me’ questions without those tools. They were critical in helping people to understand the change, and [to] make an informed decision about it when the time came.”†