Auto-enrolment Case Study 24 October 2012 Carol Young – HEINEKEN in the UK Pensions Manager.
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Transcript of Auto-enrolment Case Study 24 October 2012 Carol Young – HEINEKEN in the UK Pensions Manager.
Auto-enrolment Case Study
24 October 2012
Carol Young – HEINEKEN in the UK
Pensions Manager
Carol Young
•Pensions ManagerHEINEKEN in the UK
•DC Plan:launched in July 2011c. 2,100 active members
•DB Plan: c. 41,000 members£2.4bn assets
HEINEKEN in the UK
•UK’s leading beer & cider producer
•Heineken®, Foster’s, Strongbow, Bulmers, John Smith’s, Kronenbourg 1664
•c2,100 employees across 7 main sites
•1.2bn litres of beer and cider p.a.
•Managing 1,200 UK pubs
•3 separate payrolls
Some background
• The pensions challenge at HEINEKEN in the UK• Our aims and principles• How we engaged employees• Launching our DC plan• Outcomes so far• Steps remaining• Learning
Outline
The pensions challenge
An unsustainable risk to our businessTo do nothing was not an option!An unsustainable risk to our businessTo do nothing was not an option!
Existing DB Scheme
£570mDeficit
£1bnDeficit?
20092009 20122012
c. 42,000 membersc. 2,300 actives
2008: Heineken acquired Scottish & Newcastle
Recovery PlanRecovery Plan
Up to £61m p.a. additional employer contribs.
£50m accelerated contributions
Your aims and drivers may well be different but an insight into our journey might still help in your planning
Your aims and drivers may well be different but an insight into our journey might still help in your planning
HEINEKEN’s aims and principles
Requiring a solution that was:
Sustainable
Competitive in the market place
Centred on informed choice
“Future Proofed” for Automatic Enrolment
A “must do” business project
Not an HR project
Top level buy-in & active involvement
A “must do” business project
Not an HR project
Top level buy-in & active involvement
Engagement Comprehensive and 2-way
ColleaguesRepresentatives
HRManagers
Engagement
UnderstandUnderstand
• Why Heineken is doing this
• How it will affect me• How do I get further
information/support
AcceptAccept
Short term:• Change is
inevitable but Company support remains
• Approach is well considered
• New DC is a quality scheme and flexible
Realistic and measureable communication objectives:
Medium/longer term:• New DC is
valuable, fair and well governed
• The need to take responsibility for own retirement plans
Critical for meaningful engagementCritical for meaningful engagement
Underpin all subsequent activitiesUnderpin all subsequent activities
Planning & engagement to launch
Gradual build, multiple iterations and follow-through support
Q3 Q4 Q1 Q2 Q3
Holding Position & Building AwarenessHolding Position & Building Awareness
Organisational ReadinessOrganisational Readiness
Ongoing support Ongoing support
Formal Consultation
2010 2011
Education & Sign-upEducation & Sign-up
DCLAUNCH
AcceptanceAcceptanceUnderstandingUnderstanding
Budget Setting & Provider SelectionBudget Setting & Provider Selection
Q2
Engagement: your provider can help
Multiple channels: in workplace and at home PLUS face to face
What will work best for your members?
Outcomes: Launch Group
94.4% The overall take up rate
50Only 50 colleagues from our DB DC group chose not to join
<15% Opted for lowest initial contribution
>70% Started at highest contribution level or are tracking towards it
Only 52 Colleagues defaulted to Balanced Lifestyle (didn’t tick anything)
>11% Chose core fund or full fund range
The Rest
Made an active choice across 3 lifestyle profiles
Take-up
Contribution choices
Investment choices
• No complacency!
• Enrolled automatically through offer letter and Contract of Employment flyer – explains default options and how to make changes
• Take up still high but we have to keep working at it….
• …less evidence of active engagement with details – more default decisions than for launch population
10
Enrolling our population post launch
Fin
essin
g t
he E
ng
ag
em
en
t S
trate
gy
• Pensions training at new start induction courses
• Where employee “opts out” the pensions team issues a letter reminding of benefits given up
• All information available via our HR Portal
• Remind colleagues of providers support and information available online and by phone
Colleagues’ views
“For the first time I feel I understand the basics about pensions. It’s not always good news, but now I feel able to start planning for my own future.”
Contact Centre colleague, Livingston
“There was a lot to take in but it helped me make a positive decision about my future pension.”
Production colleague, Hereford
“The company came across as open and keen to explain the facts as clearly as possible.”
Sales colleague, Edinburgh
Steps remaining to staging date
We have a great base but there’s still work to do!
Q2 Q3 Q4 Q1 Q2
Design & agree detailed processes & governanceDesign & agree detailed processes & governance
Payroll vs. provider solution?
Payroll vs. provider solution?
Q32012 2013
Final testingFinal testing
HUK Staging
Date
Go LiveGo LivePreparationPreparation
Organisational readiness incl/commsOrganisational readiness incl/comms
Annual renewalAnnual renewal
ReviewReview
Learning
agreed objectives coupled to the right project structure
Buy-in from the very topBuy-in from the very top
to build real understanding – crucial to informed choice
Taking the timeTaking the time
start preparing early – will be a business wide project
Payroll set up is key to success
Payroll set up is key to success
Effective 2-way
communications
Effective 2-way
communications
key to building member engagement and confidence
Next