FirstGroup has changed the accrual rates of its career average scheme, revised its benefits package and will introduce a defined contribution scheme for auto-enrolment.
The transport operator - which employs some 38,000 staff in the UK - said it changed the accrual rates for the First UK Bus Pension career average scheme for bus staff to both make them more affordable and to compensate for the abolition of contracting out.
FirstGroup used to offer a choice of 1/50th, 1/60th and 1/80th accrual rate options for its scheme but has phased out the 1/50th option saying it was too "out of market and difficult to sustain in the current economy".
Due to abolition of contracting out this month, the firm has also decided to revise the other contribution rates to 1/80ths and 1/100ths for both new and existing members.
The 80ths scheme has an employee contribution rate of 5% and the 1/100ths scheme has a staff contribution rate of 5.5%.
Currently, the First UK Bus Pension Scheme operates a two-year waiting period - enrolling eligible members on a salary sacrifice basis every April.
However, this April will be the last time people are enrolled in the scheme in this way and from April 2013, the date FirstGroup goes live with auto-enrolment, employees who have completed three months' service will go into a DC scheme for the first nine years of employment, after which they will be able to join the career average scheme.
The DC scheme will see members contribute 5% and FirstGroup contribute the same.
FirstGroup group pensions and reward director John Chilman said the firm wanted to continue providing a decent pension for staff - and, unlike many, did not want to move to a completely DC solution.
He said the new arrangement would give staff who work at the firm for a long time similar outcomes to those they get currently.
Chilman explained: "People who are with us for their whole working careers - as a number are - will end up with something that is very similar in shape, in terms of total package, to their current benefit."
FirstGroup has also launched an affinity benefits package across the UK this month - allowing staff to get discounts off a wide range of goods and services.
Chilman said this fits in nicely with the FirstGroup's "philosophy of helping colleagues to make money go further" as well as targeting the under 30s, a group which he felt were not particularly well-served by some of its existing package.
Sign up to the free weekly newsletter from the editorial team at Workplace Savings & Benefits.Newsletter sign up
Check out who's made the 2015 shortlist and book your table today. For more information follow this story to the event homepage.
The programme for this year’s Professional Pensions Defined Contribution Conference – to be held in both London and Birmingham in September – has been announced.
Benefex have created a guide to communicating your reward and benefit scheme. This guide will help you build a rock-solid business case for investing in communications, help you review what you currently have in place and present new and innovative channels.
This guide will help you identify historic elements of schemes that are no longer relevant, different ways to adjust the level of premiums you pay and also get an understanding of whether your current benefits package is appropriate and delivering value for money.