The Marylebone Cricket Club (MCC) has responded to the pensions crisis by re-introducing a final salary (DB) pension scheme – bucking the trend of many organisations.
Grant Jenkins, HR and training manager at the MCC, the private members club which owns Lord’s cricket ground, said: “It’s been clear cut for many years that you cannot continue in a country where a reducing working population is funding an increasing non-working population.”
The MCC, which employs over 120 permanent staff, has now reintroduced a DB pension plan which incorporates hybrid elements. Its final salary scheme had been closed to new members since 1998.
When employees earn more than £25,000, all contributions on salary above this level are transferred to a money purchase plan with above average employer contributions. Other changes include reducing the accrual rate for the DB element of the plan from 1/60 to 1/70.
Contributions for the money purchase part of the scheme have been increased. Previously, MCC’s contribution was between 4% and 5%, based on age, but now employees under 45 will receive 7%; employees between 45 and 55 years will receive 10% and those over 55 are on 13%. Employee contributions at 4% remain the same. Accruals for the scheme will also be backdated to January 2003.
Previously, employees who joined after 1999 were only eligible for a money purchase pension plan. But Jenkins said to avoid a two-tier employment hierarchy it needed to make these changes.
“We had a very heightened provision of [final salary] pension for half the club [employees] and a very basic money purchase provision for the rest. It wasn’t ideal,” he said.
Jenkins said that because a large number of employees earn less than £25,000 per year, it wanted to make sure they would not shoulder all the risk.
The scheme is not expected to be expensive. “There are some out there that say we’re crazy and that opening the scheme is going to cost us an arm and a leg. In reality I don’t think it will.”
He added that changing its pension provision was one way the MCC could stand out from other organisations. “Unlike many PLCs and limited companies we aren’t able to offer any kind of equity-based benefits. The MCC is still a private members cricket club.”