Employers such as FirstGroup, O2, Tui Travel, Whitbread and WM Morrison are using their auto-enrolment obligations to activate a review of their pension arrangements.
The top triggers for employers to review pension plans are the cost of auto-enrolment and ensuring they get value for money, said Logan Anderson, head of customer relations at The Pensions Trust.
“First of all, it is a budgetary review, but also asking, are we getting value for money for what we pay in?” he said.
FirstGroup has reviewed the design of its pensions website and the way it communicates the plan. The transport operator is in the user-acceptance testing phase of its new online hub, which will be ready for its auto-enrolment staging date of April 2013.
After a review, O2 has proposed closing its defined benefit (DB) scheme to future accrual, partly because of the cost of auto-enrolment. The telecommunications firm plans to close its DB scheme on 28 February 2013, just before its 1 March staging date.
Tui Travel is in consultation about moving its primary pension plan, a trust-based defined contribution (DC) scheme, to a contract-based arrangement ahead of its March 2013 staging date.
It is also reviewing the contribution rates for the scheme, which has 2,000 members. Tui currently makes contributions of 5% or 10% for an employee contribution of 3% or 5%, respectively.
Anderson added: “If an employer is doing a review on budget grounds, then why not look at the whole thing, check whether the current arrangement provides auto-enrolment support, payroll support and helps after auto-enrolment?”