Launching a high-engagement DC scheme for LGPS opt-outs at a university

We were approached by a university to support with establishing a defined contribution (DC) arrangement for professional staff who had opted out of the Local Government Pension Scheme (LGPS) – circa 9% of eligible employees, equating to approximately 250 staff. 

The university’s key objective was around ensuring that all employees have some form of pension provision, regardless of affordability. To support this, the alternative arrangement was designed to be non-contributory at the entry point, with a 9% employer contribution.

Our impact

The scheme has seen strong engagement and positive member behaviour from the outset:

• 50% of members are choosing to make an active contribution to boost their DC savings.
• 20% of members are contributing at the top level of the structure (4% employee/13% employer), which is exceptionally strong for a DC scheme
• 93% of members have registered for online access.
• 70% have completed their expression of wish form.

Our role

As well as providing consultancy advice and support through the early stages of the university’s discussions with project stakeholders, we supported the university with:

• DC design - we advised on the development of an alternative DC arrangement, including modelling the potential impact on member benefits under a number of contribution scenarios, and selection of a suitable provider.
• Ancillary benefits - we advised on a Group Life Assurance (GLA) and Group Income Protection (GIP) cover to address identified needs, some of which are already partly covered through the LGPS via its death in service and ill-health early retirement benefits. 
• Eligibility - we recommended extending the DC arrangement to additional university cohorts, such as student ambassadors, and assessed the feasibility and practicality of doing so.
• Implementation - we supported the implementation of the new DC arrangement and its accompanying ancillary benefits. 
• Member engagement - we supported the university with launching the DC arrangement in an engaging and accessible way to maximise understanding and participation.
• Trade Union engagement - we worked collaboratively with trade unions to help them understand the alternative DC scheme as being a positive solution, not a competitor to the university’s existing defined benefit (DB) schemes. 

By listening to and addressing trade union feedback, we built trust in the scheme’s purpose and benefits. This constructive dialogue led the university to adapt its proposal to reflect union feedback, ensuring broad support and successful implementation.

Ongoing support

We continue to work closely with the university on governance, ensuring the DC arrangement remains aligned with the needs of both the university and its members.