Nationwide shelves plan for benefits cap

EXCLUSIVE: Nationwide Building Society has shelved plans to cap employee benefits for older workers after a review concluded that the cost of provision did not yet outweigh the value of the package to employees.

The review, led by HR director Robert Aldrich and an external law firm, was triggered by a rise in the cost of private medical insurance (PMI) claims paid out by the organisation’s healthcare trust, managed by Cigna HealthCare, over the last few years.

Aldrich said: “At the moment, we have the overall view that we want to treat everyone the same. Because of our inclusive approach, we really want to hold [PMI] open and to be seen to be a very inclusive employer.”

The organisation also considered capping pension contributions to its defined contribution (DC) group personal pension (GPP) scheme as part of the review.

Employees’ contribution rate to the scheme, which has 6,500 active members, is 4% of salary. Nationwide Building Society contributes 5% for employees with less than two years’ service and 9% for those with more than two years’ service. 

Aldrich said: “We aren’t considering a cap on our pension arrangements at this time. Currently, members of our pension scheme can continue to make contributions and accrue benefits, until age 75.  This is in line with current legislation.”

Nationwide Building Society has 16,800 employees, of which around 2,000 are aged 50 years and over, 300 are aged 60 years and over, and 10 are aged 70 and over.

Aldrich said the organisation will continually monitor the cost of benefits provision for older workers to assess the viability of retaining it for all staff.