Financial wellbeing event highlights.

On Friday 13th November 2015, we hosted the Financial Wellbeing Event at The Shard to discuss the benefits of Financial Education for employers and employees.

Yet again, the Shangri-La at The Shard was a fantastic venue, with attendees being able to enjoy a spectacular view from St Paul’s Cathedral across to Canary Wharf and more.  Please view our image gallery to see more.

The session was opened by Jonathan Watts-Lay, Director, WEALTH at work and featured other key industry professionals from CIPD, University of Lincoln, Kier and Kingston Technology as well as Jane Griffiths, Head of Corporate Relationships at WEALTH at work. A panel discussion followed the session, which included open questions from the audience and Twitter users. It raised some interesting points for discussion.

We would like to take this opportunity to thank those who attended our event – we hope it was useful and informative.

If you would like to download a copy of the presentation from the event please click below.

WEALTH at work Financial Wellbeing Event Presentation (468 downloads)

 

Image Gallery

 

Panel Discussion

The panel included:

(Chair) Jonathan Watts-Lay, Director, WEALTH at work

Charles Cotton, Performance and Reward Adviser, CIPD

Ian Hodson, Reward & Benefits Manager, University of Lincoln

Jane Griffiths, Head of Corporate Relationships, WEALTH at work

Tony Ark, Group Pensions Manager, Kier

Karen Hockaday, Human Resources Director, Kingston Technologies

The following are a selection of questions that were asked by the audience:

 

(Audience question) – Are there any concerns about any negative impact that raising awareness/understanding might bring?

I think finance is a very sensitive issue and I think we’re very upfront with people about what we’re actually providing is some education and that the decision making still remains theirs. Our job is to make sure that we give them the tools to make the decisions. I think the negativity tends to come if people feel that you are making their decisions for them. I think the approach is everything – making sure decisions are informed – that’s the angle you’ve got to come at it from. Genuinely, we have very little negative feedback. We have very few people who leave a workshop, and that’s all the way through from the seniors to the students without taking away credible knowledge and worthwhile actions. We sometimes get it where people say I wish we could have done a bit more of this or that (very specific to individuals) but we get very few people with negative comments. They see it as they have left with a better education than when they arrived. So no, I’ve got no concerns about negativity because the positives outweigh them.Ian Hodson - University of Lincoln
I wouldn’t say this is a negative, but many of our senior management are Taiwanese Chinese and culturally they set a great value on longevity of service. When certain things are put together like the abolition of the default retirement age, flexible working requests and then pensions freedoms – there is a concern that some key people might decide to leave the Company earlier than we would like. For me that’s not an issue because the landscape is the landscape and that is their right but if you think that’s a possibility, if you think raising awareness of pensions freedoms may lead to some people choosing to   retire earlier than they thought or semi-retire, because they can, then the solution is to talk about succession planning – so if there’s an issue, there’s a solution. Karen Hockaday - Kingston Technology

(Audience question) – What should be put in place in terms of remuneration and benefits if there’s a growing number of employees who will opt out of DB or DC because of the pensions limits?

Due to the lower allowances, I’m seeing more organisations offering cash to senior employees as an alternative to pensions. When it comes to those in low-paid jobs or younger employees, many don’t save for their retirement due to other financial priorities, such as saving up to buy a home. However, I think it’s important with this group that you try and support them with saving. If people say “I can’t afford to join the pension because I’m saving for a house”, you can look at ways to help them to buy a house and once they have got one you can use that as an opportunity to help them to start thinking about saving for their retirement. Rather than use the money as a pension contribution you can use it to help them save up for a deposit. You can also offer to help them to set up a savings account and take the money out of their salary and pay it directly into their account. Once they’ve got the house, then you can start talking to them about saving for their future through the pension scheme.Charles Cotton - CIPD
Do you think with people potentially opting out, that’s going to lead to Reward and Benefits Managers thinking we need to find other benefits to give – cash is an obvious one but are there other things that may be considered?Jonathan Watts-Lay – WEALTH at work
We’ve thought about giving additional share options or increasing the basic pay, but as an organisation we’ve actually gone down the cash route – so offering a cash allowance for anyone that wants to pay over the annual allowance is given back as cash in the payroll. There are other options but as a company we’ve gone down the cash route at the moment.Tony Ark - Kier
It’s quite interesting looking at people that are opting out, and some of those final salary schemes. Some research was done in the university sector looking at Vice Chancellors and a large number have opted out, whereas that was probably a bad idea for some people and they’ve started opting back in again. For me, that goes back again to education because they saw that big tax charge but probably didn’t really understand the true implication of opting out.Jonathan Watts-Lay – WEALTH at work
Well, I was having a conversation recently with a senior decision maker from the private sector who expressed a concern which stems back to that: If somebody opts out because they’ve reached the lifetime allowance, do we pass them the benefit back as cash? That’s been happening because that seems more tax efficient, however, then you have to deal with the press that goes along with that in the public sector – senior salaries look like they rocket, so you have to take that in to consideration. Their view was that the opportunity to have a pension is a contractual matter, therefore everybody technically has a contractual right to the employer contribution and if they choose to come out of the pension, the employer should honour that contractual arrangement and give them that money in another form. That’s quite an interesting perspective as to how somebody who’s very senior and from the private sector perceives that there is this company pot of money that is there for them to support them, therefore, if they don’t take it as a pension we should be doing something else with it to give it to them. So, I think it’s a pretty much open landscape as to what other financial vehicles can we give to people if they do choose to come out of their pension. As we see annual allowances and lifetime allowances coming down and down, and people working for longer, it’s going to become something you’re going to have to decide as part of your rewards strategy as to what you’re going to do.Ian Hodson – University of Lincoln

(Audience question) – What is your experience as to how companies identify and communicate to groups who might be up against the LTA or AA?

It’s quite interesting really because different organisations will identify people via the salary range, whilst other employers will just go out to everybody because they know that some people on the shop floor for example, may actually just be paying into pensions because they’ve earned money elsewhere. So different organisations will do different things but the majority will do some sort of targeting against a salary level, then provide some sort of factsheets or something for those people who don’t get to be targeted to attend an event – there’ll be something for everybody to read.Jane Griffiths – WEALTH at work
I’ve been thinking about that in respect of the double input period of the annual allowance because of the mini budget in July. I don’t think we’ve got many employees who would be able to benefit from putting £40k into their pension each year, so for me it’s really important to differentiate because I don’t think it would be a very good message for our workers in the warehouse, who might be on a salary of £15 – 16k to receive a Company communication highlighting a world where people have to worry about putting £40k into their pension! It’s quite a tricky one.Karen Hockaday – Kingston Technology

(Audience question) – Tony, you mentioned in your presentation that you closed your DB scheme, you moved 600 people out of that into DC, then offered them information telling them that they should be saving more for retirement. How did you tackle that because I have the same issue?

It wasn’t that difficult. As part of the negotiations of moving them, we did ring-fence them at different contribution levels to everyone else. So as part of the consultation, we agreed that they would come in and be ring-fenced at a slightly higher contribution level than the standard members of our DC scheme. So, they are privileged with a higher contribution level, although it is DC. But still, the message that we’re promoting is still the same – that we still want them to pay more and benefit from the tax relief and paying AVCs.Tony Ark - Kier
We’ve been in a very similar position. At the end of the day people are living longer and the numbers just don’t stack up. The first step is just helping people understand why pension schemes have to change and actually when it’s placed in front of them, if it’s explained in the right way it’s clear that things have just got to change – it’s just the state of society. So, do as much as you can thereafter and try to separate the two issues. One is: are their pension schemes and their existing format affordable and do they have an existence? The second is: what can we do instead and make it the best offering as an employer? We’ve been through a very similar circumstance, and it’s just change – it’s got to happen.Ian Hodson – University of Lincoln

 

What our attendees had to say:

“Jonathan Watts-Lay and Ian Hodson particularly good sessions and presentation style.”

“Particularly enjoyed the case studies, especially the University of Lincoln talk.”

“Informative & relevant to myself personally & to the company as a whole based on the 90 languages we have as a workforce.”

“Event location was wonderful. Ian from Lincoln University was a brilliant speaker and I was highly engaged.”

“Very interesting with a good mix of speakers from different sectors.”

“Great discussions, has really got me thinking about my pension & ‘financial wellbeing’ – Great food for thought. Please contact me about future events.”

 

For more information please contact us.

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