The Hymans Robertson DC scheme has embraced the idea of freedom more than most, and wants to make sure its scheme practises what the consultancy preaches
“One of the sayings that we have here is that we want this job at Hymans Robertson to be the best job you’ve ever had,” Steve Moore tells me, and as the consultancy’s head of HR he’s in the perfect position to make this wish come true. HR is clearly central to Hymans Robertson’s ethos – and not just because those are the firm’s initials.
Sitting in a room overlooking the Museum of London, Moore tells me what makes Hymans Robertson stand out – and what won the scheme a place in Pensions Insight’s Top 50 DC schemes.
“We spend a lot of time and effort thinking about the scheme,” he assures me.
“We’ve got a very good governance structure in place with our DC governance committee, and we’ve got a good contribution structure and communication. We listen very carefully to what employees want and try to deliver that in the best way”.
The contribution structure is indeed generous – for every pound the employee contributes the employer will put in £1.50, up to a maximum of seven and a half per cent. The employer contribution rate rises to £2 for every pound from the employee in exchange for five years’ service, and this structure has the higher cap of ten per cent.
Since the 2014 Budget, flexibility has been the flavour of the month. What sets Hymans Robertson apart from its peers are the meaningful ways it has found to offer its staff appropriate choices.
It occurred to us that sometimes during people’s lives that little bit of extra cash is quite helpful as a short term burst”
The two mechanisms the scheme uses to help its members tailor their benefits to their individual needs are contribution holidays, and what Moore calls the GPP/ISA split.
Provided the employee has worked for Hymans Robertson for two years they can elect to stop paying into their pension for one year only. The employer’s contribution then goes to the employee as cash so they can increase their take home pay, which will be subject to tax. The employee would then be expected to return to pensions saving at the end of that year.
“It occurred to us that sometimes during people’s lives that little bit of extra cash is quite helpful as a short term burst,” says Moore.
“What we’ve found is that perhaps people who were thinking about starting a family might [opt to take a contribution holiday], or people who were getting married or buying a house…The idea is to respond to that and give people the opportunity to increase their take home pay and not compromise their medium to long term savings plans”.
Hymans Robertson is looking to achieve balance between short term savings driven by lifestyle changes and longer term planning. Another mechanism they use to help their employees manage these ostensibly competing aims is their GPP/ISA split.
The advantage is the employee doesn’t miss the cash and they don’t get tempted to spend it if it goes into their bank account first”
Again, the employee must have been in the scheme for two years to qualify for this feature. Once they have ticked that box they will be entitled to redirect their own contributions into a workplace ISA, whilst the firm continues to make its contributions into the pension scheme. The employee would be able to save over the course of the year and take their money out at the end to spend as they choose.
The employee’s contribution is paid into the ISA straight from payroll. “The advantage is the employee doesn’t miss the cash and they don’t get tempted to spend it if it goes into their bank account first,” says Moore.
The short term nature of these flexibilities means the Hymans Robertson scheme does not lose sight of its overarching aim – to provide a realistic replacement income for staff at the point when they feel ready to retire.
It is important for the scheme to measure its performance to ensure that it is on track to help members meet this objective. Moore and his team run analyses on the scheme’s progress, and deploys the consultancy’s own Guided Outcomes tool.
“The main principle [behind Guided Outcomes] is around helping to manage a member towards an adequate income in retirement,” explains Lee Hollingworth, head of DC at Hymans Robertson. “The member is set an income target and then on an annual review process they’re assessed about how likely they are to achieve that target”. If the chances are slim, Guided Outcomes will suggest changes members can make to improve their prospects.
The short term nature of these flexibilities means the Hymans Robertson scheme does not lose sight of its overarching aim”
Information gleaned from Guided Outcomes’ analysis can be delivered via an online portal, or in print. Communicating with members is a top priority for Moore. The primary channel for getting the message across is the scheme’s intranet, where members can find updates from governance committee meetings, fund performance, and ideas about the future of the scheme.
Desk drop communications are also proving popular with the team. “It’s sometimes quite nice to get a physical piece of paper on your desk…It breaks the routine of always getting information online,” says Moore.
The third type of communication which the scheme offers is face-to-face. Hymans Robertson runs annual roadshows where they showcase all the employee benefits on offer, including pensions, and gives employees the opportunity to ask questions. The scheme also runs personal inductions for new joiners to ensure that they are au fait with the pensions options and how they can make the best use of their benefits.
For Moore, the appeal of working in reward is that “it’s what most people come to work for – to make a living, to have cash in their pockets to substantiate their lifestyles…Getting that right is so important in the employee proposition”.
He has worked for Hymans Robertson for eight years, but his enthusiasm is still palpable. In part, this is down to the wide-ranging and dynamic nature of his role, which covers employee benefits and reward, but also extends to recruitment, including graduate recruitment, and ongoing employee engagement.
Getting that right is so important in the employee proposition”
“What drives me on is just wanting to always improve, and have something which is the best it can possibly be,” he says. “What can we do to make somebody’s reward package better, and more importantly to make their job as a whole more interesting? If something doesn’t improve the experience of work with Hymans Robertson for an employee then it’s probably not worth doing”.
The 2014 Budget added some extra spice to Moore’s undertaking. The Chancellor’s announcement has thrown up a number of questions around the governance committee table. The committee is working on what it calls the “Hymans Robertson journey”, looking at what the default fund needs to look like post-Budget, and how to communicate those changes effectively.
If something doesn’t improve the experience of work with Hymans Robertson for an employee then it’s probably not worth doing”
Another priority for the scheme over the coming year is to enhance the use of Guided Outcomes for Hymans Robertson staff. “We’re going to launch a platform that we use for employees later this year, before autumn,” says Moore. “It’s going to be a big exercise for us, but it’s trying to make sure that what we do in-house is totally aligned to what we do for clients”.