Ofcom has structured its pension schemes to allow staff to take advantage of the new rules governing group life benefits.
The communications regulator, which offers staff the choice of a defined benefit or defined contribution pension scheme, funds a basic cover of four-times salary on lump sum death-in-service benefits for staff but allows employees in its DC scheme to select cover of up to 20 times salary.
Philip Baker, a principal at Towers Perrin, said: "Beforehand, it was limited to four-times salary which was standard practice. It’s particularly attractive to employees because from [next] April their beneficiaries will be able to have a lump sum of £1.5m. It enables employees to exercise this new flexibility."
While it was not possible to offer staff in its DB scheme the same level of flexibility because of the need to offer a comparable pension to the public sector scheme they had received under previous regulators, they are still able to flex this benefit to a certain extent.
Baker explains that Ofcom wanted to offer death-in-service benefits that were not so strongly linked to pensions.
He added that the merger of five regulatory bodies from which Ofcom was formed provided the opportunity to incorporate pensions simplification into the design of its schemes. Baker said: "It was very important to recognise what was around the corner."