Thomson Reuters unveils pension freedoms for staff

It plans to launch the reforms in September after it consults its DC scheme members, UK website Workplace Savings and Benefits reported.

The move comes after the firm explored the new pension freedoms which emerged from the 2014 budget and decided what the maximum advantages could be for employees given the company's purpose and values.

Speaking at an employer pensions and benefits conference, Thomson Reuters' head of international benefits Matthew Webb said: "We looked at whether the best option would be to have a pension supplier provide these freedoms or whether we should look at offering these new flexibilities within the plan. We came out on the side of using the plan to compliment the flexibilities.

"A lot of companies over the last six months seem to have had a wait and see approach, but we have gone further, looked to embrace these freedoms and tried to make the most of them for our employees and members."

As part of this, the company looked at

• costs members would incur if they transferred out of the plan
• continuity when encouraging employee investment in institutional funds and having a long-term strategy
• convenience by educating employees, particularly younger members, to take advantage of the flexibilities on offer.

The company will also focus on communicating the new pension freedoms and options available to employees aged around 50, with communications for younger staff aimed at promoting contributions.

"Our thoughts about the process around the communication and education plan are whether we do it in-house or get third party support to do that", Webb explained. "And if we have to mandate meetings with employees at age 50, how we can do that?

"We don't get a lot of engagement from employees, certainly younger ones, so we thought that employee engagement and communicating the convenience of adopting the flexibilities on offer would be advantageous for them.

"Every opportunity doesn't come without its challenges and we've had a working group to address the challenges and issues of these new pension freedoms. However, we are having ongoing discussions with the administrators who are confident they can offer a draw-down approach to these freedoms," he added.

Webb also said that the asset allocation of the default fund would change ten years before retirement from a diversified growth fund. At this point the plan would be split into cash and bonds to match a potential annuity, and then 50 per cent equity and 50 per cent bonds at the point of retirement. ■