Consulting firm Aon has introduced a salary sacrifice arrangement for its defined contribution pension scheme in its flexible benefits plan. All employees who have been with the company for two years or more on 1 January 2006 will be eligible to participate in the arrangement, which will be based on a range of age-related contributions.
By sacrificing a portion of their salary, staff qualify for higher employer contributions. Michael Rose, director of reward and recognition, said that the firm had wanted to make the move for some time, but had waited until its flex plan was capable of supporting the scheme. "We had looked at pensions salary sacrifice some time ago, but decided that once we had a flex scheme up and running we could introduce it and run it."
He added that employees’ savings on tax and national insurance contributions would provide them with an additional pool of money to spend in the flex scheme. "Most [employees] will be able to buy a year’s travel insurance or a day of holiday with the savings."
The firm also introduced flexibility in to its long-term disability benefit and has limited the amount of childcare vouchers to £50 a week. "It’s complicated to administer if you allow employees to take any more," added Rose.