Skipton Building Society offers its employees a company-sponsored stakeholder pension from Norwich Union. It recently ran a national roadshow to encourage staff to increase their pension contributions from the previous minimum of 0.5% to at least 3%, and take a more active interest in the scheme performance by monitoring it online.
As a result, around a third of employees increased their contributions, which they can now make by salary sacrifice.
Paul Scott, pensions expert at Pearson Jones, the society’s independent financial advice subsidiary, says: “There are 45 funds available in the pension, although 92% of people currently end up in the default fund, which is a balanced managed fund, until they are 55, after which they are switched to safe investments.” Scott believes the level of contributions is a crucial factor in a defined contribution pension. If an employee now contributes the minimum 3%, Skipton’s contribution is 5%. This rises in steps to a maximum top up of 8% on a 6% employee contribution.
“We take the pension issue seriously, as although all the regulatory risk is with the individual on a stakeholder plan, Skipton is the largest employer in the area and wants people to retire on a decent pension,” says Scott.