Law firm Linklaters has closed its final salary pension scheme to future accrual and reviewed its risk benefits as part of a new approach to employee benefits.
After reviewing the efficiency of its resources with assistance from broker Aon Consulting, the firm is also removing its death-in-service pension benefit and adding a service cap to its income protection cover.
It intends to invest more resources in a pre-emptive approach to reward. This includes launching an employee assistance programme next month and developing a comprehensive health and wellbeing strategy, focusing on nutrition, ergonomics, fitness, emotional resilience and workload management.
After two and a half months of consultation, which began in the summer, the firm’s 50 final salary scheme members are being enrolled into its group personal pension (GPP) plan.
More sustainable
David Jones, reward and benefits manager, said: “It has gone very smoothly. The change was understood by staff, but on a personal level they were, understandably, disappointed. Our pension provision is now more sustainable, and all staff are now on a similar basis.”
The income protection benefit will now apply only to staff who have been at the firm for more than a year. “A new hire with that level of absence would not have contributed significantly to the business,” said Jones. “It seems unduly generous to provide such a benefit in those circumstances. Introducing a service cap makes the benefit more focused and sustainable. If you assume a 10% turnover, then at any time, 10% of our people will have less than a year’s service and therefore the population we are insuring reduces by 10%.”
Increased life assurance
Linklaters has also increased its life assurance lump-sum benefit from four- to five-times salary. In doing this, it has also removed the death-in-service benefits, which had low utilisation and low visibility among staff.
Ann Guiney, reward and benefits adviser, said: “An improved life assurance [perk] benefits everybody, whereas the death-in-service benefit only benefited those with dependants.”
Jones added: “This has been a challenging year. However, it has allowed us to reshape our deal, by reducing liabilities and redeploying resources to offer more pre-emptive and incentive benefits such as staff wellbeing.”
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