How the Living Pension is boosting retirement adequacy at Herbert Smith Freehills
Herbert Smith Freehills developed and launched a Living Pension with the Living Wage Foundation last year, the firm’s global head of reward and benefits told the Trends in benefits design: navigating talent, economic and cost pressures REBA webinar earlier this year.
“We were one of the very first employers to be accredited,” Ellie Vaughan said. “The Living Pension is based on increased contributions designed to deliver long-term financial security for individuals.”
Before accreditation by Living Wage Foundation, 35% of new joiners to the firm were benefitting from the higher contribution rates. Now 87% of new recruits are signed up.
The pension requires Herbert Smith Freehills to contribute a minimum 7% of the full basic salary. “Obviously that comes with a huge cost impact, which is offset slightly by the National Insurance savings through salary sacrifice,” Vaughan added.
She said it’s in the firm’s interest to support employees with their pensions. “Otherwise we could find ourself with a large portion of the workforce who are unable to retire.
“This has a knock-on effect on the cost of our benefits in future, because of the compounded effect of a future ageing workforce,” Vaughan added.
The firm has also introduced a wellbeing fund as an alternative to gym membership, which employees can access for things like osteopathy, instead of claiming on PMI.
“It means employees can claim back up to a certain amount for wellbeing activities, which could be for physical or mental wellbeing,” Vaughan said. “We’re also seeing people claiming for things like dance classes, rock climbing and horse riding.”
