United Health plans three-tier approach to pension reforms

United Health Group is developing a cost-effective, competitive strategy to deal with the 2012 pension reforms, which will introduce auto-enrolment, and compulsory employee and employer contributions.

Although the health benefits and services firm intends to make pension contributions above the statutory minimum for its UK employees, it is looking at three different approaches to complying with the reforms, calling them bronze, gold and platinum.

Under the bronze offering, it would meet the statutory requirements, while the gold approach would see it offer contributions above the minimum and possibly start auto-enrolment earlier than its 2013 staging date. The platinum approach would see it offer a very competitive contribution rate, to be adopted ahead of its staging date.

Chad Murphy, compensation consultant at United Health Group, which hopes to have its plans finalised by August or September, said the firm was keen to get the job done early because of potential acquisitions. “In the case we have a UK-based acquisition, we would have to pull all plans forward. We would rather be prepared for that.”

United Health Group plans to retain its existing group personal pension, through which most of its 450 UK staff get matched contributions up to 5%. Take-up is above 50%.

The firm has also conducted analysis on the savings behaviour of different groups of staff. “We have done analysis on the groups who do not contribute currently in terms of age and gender,” said Murphy. “We expect similar people to opt out.

“In our clinical research operation, we tend to get people who come to the UK, do clinical research with us and then move on quite quickly after two or three years. So we know that group is not going to be interested in a UK-specific plan.”

Read more on the 2012 pension reforms