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The survey looked at benefit provision in 69 UK-based financial sector organisations, covering 15 benefit types and different employer approaches to benefit provision.

The survey shows finance sector employers offering their staff an ever-wider variety of options under flexible benefit plans, which enable employees to choose the structure of their benefit packages. Choices available to employees now range from traditional benefits such as private medical insurance and life assurance to cinema tickets, wine club membership and bicycles.

David Wreford, a principal at Mercer Human Resource Consulting, said: “We see the prevalence of flexible benefits, and their design, as a measure of the maturity of companies’ benefit plans, their attitude towards attraction and retention of employees and the depth of their pockets. Flex plans are highly suited to dynamic businesses and support the values they are trying to promote.”

Currently, flexible benefits are offered by 29 per cent of the companies surveyed.

Family-friendly practices

It is becoming increasingly important across all sectors to offer employees the flexibility to enjoy a healthy work-life balance, and the survey shows the financial services sector to be at the forefront of these changes. Over 40 per cent of companies surveyed have formal policies on offering flexible hours to staff, but many more operate informal arrangements. While some 21 per cent of firms surveyed have formal policies on home-working and telecommuting, another 24 per cent operate informal arrangements. The majority of companies offer private medical family cover, with 73 per cent offering access to private GP services.

Mr Wreford commented: “Health and welfare packages are more generous in financial services than other sectors.  This is in large part because these companies tend to make greater demands on their workers, so as a counter balance they need to be viewed as caring employers.”

Company car policies

Nearly half the companies surveyed (43 per cent) do not make company cars available as a benefit to any category of staff, with many opting to roll the value of the benefit into base pay. Amongst those who still operate a company car policy, 54 per cent also offer a cash alternative.

Mr Wreford said: “The significant withdrawal from offering company cars is partly the result of a decline in demand, with more people living and working in metropolitan areas. At the same time, the administrative burden of car policies, the complex tax implications and company ownership issues have contributed to many companies shying away from this benefit.”

Pensions provision

Eighty-five per cent of the survey participants have legacy final salary pension schemes, but only 15 per cent are still running defined benefits schemes open to new employees. Most of the schemes open to new entrants are defined contribution plans. These generally have a normal retirement age of 65. Most (71 per cent ) of the organisations surveyed vary their contributions for employees on the basis of factors such as age, length of service and the level of contribution the employee chooses to make. Typical contribution levels for a 35 year-old employee with five years’ service are 2 – 2.5 per cent with a median employer contribution of 10-10.5 per cent.

Recent and future changes to benefits provision

Sixty-two percent of the participating companies have recently made changes to their pension plan provisions, mainly due to legislative changes and cost containment, but also in response to competitor activity. Looking to the future, 34 per cent are planning changes to their company pension provision and a significant 40 per cent will make changes to their flexible benefits offering. The main reasons cited are competitive pressures, followed by cost containment and legislative changes.