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Case studies: fleet street has given pensions boardroom notoriety, now could be your chance to help steer bosses towards total reward. (Industry Overview) Sarah Ball.
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Employee Benefits, Nov 2002 pS13(2) Case studies: fleet street has given pensions boardroom notoriety, now could be your chance to help steer bosses towards total reward. (Industry Overview) Sarah Ball. Full Text: COPYRIGHT 2002 Centaur Publishing Ltd. The national headlines say that pensions are in crisis, but in every crisis lies an opportunity. And benefits managers are in the perfect position to rethink pensions in the context of total reward, and to see what opportunities there are for the benefits they invest in. At the October launch of the National Association of Pension Funds' (NAPF) report Pensions--Plain and Simple, chairman Peter Thompson said: "Employers should make an informed choice over changes to pension provision." He appeals to employers set on closing their final salary defined benefit schemes (DB) to consider alternative design options to defined contribution (DC) plans, such as DB/DC hybrid schemes and DB schemes based on career average revalued earnings (Care). Over the past year, Employee Benefits has reported on these designs and on the sprinkling of organisations that have already pursued some of these options, including Nationwide Building Society, The Pensions Trust, Safeway and Tesco. A benefits manager's role stretches beyond the mechanics of pension scheme design to the so-called softer elements of the total reward offering, such as communication, consultation and flexibility. These can be as important as hard remuneration in employees' perceptions of their employment deal. The fallout from the last two years of DB pension scheme closures demonstrates that the organisations which carefully considered this side of the equation have emerged less battle scarred than those that haven't. Employee consultation Companies that have attempted to move existing employees (rather than just new staff) into DC schemes perhaps underestimated the controversy their actions would cause. At Ernst & Young and the Big Food Group (formerly Iceland), this resulted in legal action, and at steel company Caparo, a strike. Ken Penton, a spokesman for the Iron and Steel Trades Confederation (ISTC) which represented Caparo workers says: "[Caparo's] reluctance to discuss the situation left us with no alternative." Caparo ended up re-establishing the DB scheme on a modified basis, with concessions from both sides.
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