Diageo is using pensions simplification as an opportunity to review its longer-term pensions strategy.
The drinks firm, which offers a defined benefit retirement scheme to all employees, wanted to ensure that its pension scheme remained competitive.
Paul Charles, pension strategy and policy manager, said that the scheme was becoming increasingly important when recruiting and retaining staff. “The opportunity arises from the flexibility in the proposed changes. Simplification brings an opportunity for modernisation of the plan and there are a lot of things we can do to make things a bit simpler in terms of understanding pension benefits and driving up the appreciation of benefits.”
Changes currently under consideration include factoring in increased employee life expectancy into the scheme’s design. Charles added that this was not being looked at in order to control costs.
Communication is also a priority for the company. “The important focus for us is to demystify the perceived complexity of the new tax rules. What we’re trying to do is communicate in very simple terms so those people most affected [can look at] what sort of action they may want to consider taking,” said Charles.
To help employees understand simplification, Diageo is currently working with communication consultants to develop a tool to guide employees through the process.