NHF Defined Contribution survey – can the sector provide better pensions?

LCP recently ran the NHF’s inaugural survey on Defined Contribution (DC) pension schemes and contribution structures within the housing sector. I am delighted that we received responses from more than 50 housing associations, providing detailed insight into benefit provision.

The survey considered pensions scheme design, contribution levels and member engagement across the sector.

The key findings were:

• The majority of associations are now offering a DC pension to new joiners, in line with the trend away from Defined Benefit (DB) across the UK. The most common DC scheme offered is the Social Housing Pension Scheme, but there is a wide variety of providers used across the sector, and we have helped some organisations review their provider, particularly in recent years.
• Many associations enrol new joiners at the auto-enrolment minimum rates but there is a wide range of options and where employees move away from the standard contribution rates, the maximum rates employers will pay vary widely.
• We compared contribution structures to one external benchmark – the Living Pension requirements. Whilst many associations will provide access to contributions at or above the required level, not all do, and less than 3% of associations currently enrol at this level (which is a condition of obtaining accreditation).
• Salary sacrifice is not consistently used across the sector. This is an opportunity to pay contributions in a more efficient way and could free up some cash to improve matching structures.
• Only 20% of respondents felt their employees highly value their pension scheme. Pensions are a significant spend for organisations, and if they are not valued by staff employers are not getting the best “bang for their buck”. Could sector-wide engagement programmes help with this?

Read more about the key findings of the survey.

Please contact me, or your usual LCP adviser, if you would like to discuss your Defined Contribution offering.