Tailored modelling tools help
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n 2002, Eli Lilly and Company (Lilly) reconfirmed that it wished to continue to provide
pension benefits to employees through a defined henefit arrangement. In making this
substantial commitment to the plan, the company
wanted to ensure that it maximised not only the
actual value to the employees but also the perceived
value of the scheme.
This led the company to a number of action
steps. Firstly, it rebranded its internal HR communications using the strap line "Because People
Matter" to reflect the external Lilly brand of
"Answers that Matter".
It then launched an online flexible benefits
scheme, called LillyFlex, which offers employees a
range of lifestyle options. Embedded in the new
selection of online benefits is the opportunity to
make additional voluntary contributions (AVCs)
via salary sacrifice. These special employer contributions pass on a 5% top-up to staff, funded by
the company's national insurance savings.
Linked to the online LillyFlex site was a bespoke
pensions modelling site. This pulled out employees' personal data and allowed them to model their
income in retirement with a range of alternative
retirement dates, special employer contribution
levels, working hours and varying amounts of taxfree cash. This not only allowed employees to
appreciate the cost of saving for pensions and,
therefore, to value the Lilly Pension Plan, but it
also allowed them to make effective choices for
their own financial future.
Since its launch in mid-2004, LillyFlex and the
pension options within this have proved highly successful. Over 90% of employees have made positive
choices through the online tools and around 60% of
employees have actively modelled their pension.
Take up of additional savings through AVCs and special employer contributions has increased from 30%
of the employee population to 50% of staff.
The annual opening of the flex plan also provides the HR teams at the site with an ideal
opportunity to interact with employees and to reinforce to them the value of their overall reward
package. The company has also used these annual
reward roadshows as the opportunity to roll out
online total reward statements and to explain the
Finance Act and Pensions Act changes, which were
introduced in 2006. Feedback from employees for
these sessions and the online tools has been excellent. In a recent survey, almost 90% rated the
roadshows as excellent. The pension plan was also
shown to be one of the most highly-valued attributes of working at Lilly, and the one with the
highest approval rating from employees - 97% voted
it as favourable.
The programme has met all of its original business objectives around improving employee
appreciation but it has also exceeded its original
business case for savings generated through reduced employer national insurance contributions.
The programme has also been key in getting employees online, and subsequent training delivery
has been completed online for all employees, generating additional savings for the company.
The pension plan itself and the rebranding that
took place also provided the opportunity for the
whole of HR to reposition itself and reconfirm the
balance between individual and company responsibility, encouraging employees to self select and
make informed choices.
• Julie Osman is director of pensions and benefits at
Eli Lilly and Company
Best practice tips
• Align external and internal branding.
• Be clear on messages and maximise
• Have a clear business case to demonstrate value
to fhe organisation.
• Gain the support of the broader HR community to
position pensions as part ot the value proposition
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