EXCLUSIVE: Guide Dogs has closed its final salary pension scheme to future accrual.
The charity held a 90-day consultation with its defined benefit (DB) pension scheme members about the closure of the scheme between September and November 2012. The scheme was closed to future accrual on 31 December 2012.
Justin Keppler, pension and core benefits specialist at Guide Dogs, said: “Having an active final salary scheme in place is becoming a rarity in this day and age.
“Being a charity, we wanted to ensure we were able to guarantee the pension to date, but alleviate the risk going forward from a financial perspective. [We also wanted to] get ahead to make sure we were compliant for auto-enrolment, offering our employees a good standard of pension, but trying to alleviate some of the huge financial risk associated with a final salary pension scheme.”
A new group personal pension (GPP) plan, provided by Zurich, was launched on 1 April 2011 to replace the DB scheme, which closed to new joiners in March 2011.
During the consultation process, Guide Dogs explained to DB members that they could join the GPP from 1 January 2013. Keppler said: “It’s open now, so we’ve encouraged ex-DB members to join it.”
The charity also communicated auto-enrolment to staff. With a staging date of 1 October 2013, the GPP is already compliant. However, there is still some work today over the next few months.
“We started work on it last year,” said Keppler. “We did as much of the pre-work as we could do. Now it’s a case of finalising our systems, and ensuring that our policies and procedures are in place for October.”
The GPP was awarded a Pension Quality Mark (PQM) from the National Association of Pension Funds in January 2013 for the way it communicated with its 1,200 employees, its generous contribution levels and its level of pensions governance. A pensions governance committee meets quarterly. Guide Dogs matches employee contributions plus 2% to a maximum of 9%.