From Links of London to Travelodge, why business superstars have enrolled staff on a pension scheme

And why you should too…

Every employer is now legally obliged to offer a workplace pension scheme. Here’s how these businesses did it.

If you’ve been ignoring automatic enrolment, now’s the time to stop – otherwise you risk a fine of £50,000. To inspire you to take action, here are the experiences of four businesses who recently introduced a workplace pension scheme…

Chartered surveyors Dalcour Maclaren brought forward its staging date and has already enrolled its eligible workers into a workplace pension scheme. Here’s what Nicola Putt, company administrator, Daclour Maclaren, told The Pensions Regulator

Auto enrolment: the first steps

Dalcour Maclaren had 50 employees when the directors decided to bring forward our automatic enrolment staging date. At that time, none of our employees were in a workplace pension. Most of our staff are young and didn’t have any kind of pension.

I was asked to look at which provider we should go with. Before that, I didn’t really know much about automatic enrolment.

I did not have the time to read large amounts of information, but it was important that we made an informed decision and understood the options available. I read up on the idea behind automatic enrolment and looked at what products were on the market and considered how they might work for us.

The role of an external provider

Because I do all the HR on my own, I wanted to pick a provider that I thought was going to be able to help me along the way. Our provider has given us a huge amount of help.

It’s really important to know exactly what you need your provider to be able to offer you. We wanted the provider to offer software support that assisted with workforce assessment. That’s something I was very clear on at the outset. I wanted to make sure that we picked a pension provider who could give us what we needed which was plenty of support, including presentations and communication for the employees.

It’s a good idea to get recommendations from other employers. I looked into what other employers had said about who they had used, including how the provider had dealt with any problems they might have experienced.

Taking time to do the comparison lists and think about our own needs has resulted in a decision that has worked for us.

Ongoing duties

Automatic enrolment was my first experience of introducing a pension scheme and certainly that will be the same for thousands of people in smaller organisations over the next three years. Inevitably, this means certain elements are challenging; there is a whole new set of terminology to get to grips with.

You are dealing with confidential salary information and personal records, so there are a limited amount of colleagues you can confer with for hands-on help. As the HR administrator, it fell to me to implement and manage our automatic enrolment on an ongoing basis. That meant a burst of work in a short period of time. It’s important to allow yourself this time.

Our current size means I am still able to manage the ongoing duties manually. I think most employers would benefit from automating as much as possible. It now takes me a couple of hours each month to upload the information via our provider’s software. That tells me if the employee is eligible or not eligible.

Employee reactions

Today, the moment anyone joins the company I do an induction for them. I always talk to them about pension schemes and about why we do it. Some of these people are only in their early twenties and they say things like, “oh goodness, I don’t even want to think about a pension!”

When I explain to them why the government is doing it and why we thought it was a good idea, then pretty much everyone has appreciated it and seen the benefit it can bring.

Staging dates

As a smaller employer we hadn’t been due to automatically enrol our workforce for almost three years, but as a forward thinking company the directors were very keen to offer a workplace pension and they elected to move our staging date forward to January 2013.

Folli Follie Group, the company behind fashion brands Links of London and and Folli Follie, took Secondsight’s help to automatically enrol their employees on a pension scheme. Since the business auto-enrolled, pension take up throughout the entire company has risen to 60%, with only 0.8% opting out.

Follie Folli

Q. What first steps did you take towards implementing a workplace pension scheme?

We worked closely with employee benefit advisers Secondsight. The implementation of the new pension took place on 1 October, 2013 for 85 Links of London and Folli Follie staff already in the company pension scheme.

Within head office, take up of the pension stood at 50% and in the retail stores this figure was just 24%. Since the business auto-enrolled, pension take up throughout the entire company has risen to 60%, with only 0.8% per cent opting out – significantly less than current industry opt out rates.

 Q. Did you take help from external partners at all?

Prior to the transition – and following the guidance of Secondsight – the new pension provider met with those staff in the old pension scheme, and advised on a pension contribution match of up to 5%.

In addition, members were able to attend presentations held by Secondsight which took them through how a pension works and the changes taking place with pension schemes. Supporting communications, including letters and newsletter articles, were sent to employees and posters were displayed around the company locations.  

Q. What reactions did you get from your employees?

The new scheme was well received; working with Secondsight, the transition has been very straightforward.

Q. What surprised you about the enrolment process?

Pensions can be a complicated subject, but Secondsight made sure that everything was written into plain English and staff received clear communications.

Q. What advice would you give to other businesses?

Communicate the new pension scheme as effectively as possible and encourage greater take-up. Educate employees by showing them the visibility of the funds they have invested in. We believe it is this level of engagement lead to an increased take up.

 

Nottingham-based marketing agency, bcsAgency, counts Eversheds, Siemens and CapitalOne Bank as clients. With an annual turnover of £1m they employ 15 people. We caught up with managing director, Murray Carmichael-Smith.

BcsAgency

Q. What first steps did you take towards implementing a workplace pension scheme?

Initially we spoke to Dains, our accountants, and asked for their opinion. Then we did some research to find out what the government automatic enrolment dates were. After looking at what the total annual cost would be if all employees took up the scheme, we decided to bring it in immediately – three years before our scheduled automatic enrolment [the company’s staging date] – to further improve our staff benefits package.

We went for an off the shelf package which was recommended to us as the most suitable option for our employees. We Implemented the NEST pensions scheme so that we didn’t have to physically set up our own scheme as such.

Q. Did you seek help from an external partner at all?

Yes. Our accountants recommended an IFA to us – who had helped a number of other clients. They took us through every step of the process of getting the scheme set up and offered us support for the first year.

Q. What surprised you about the enrolment process?

There was a lot more administration than we initially expected and it was quite a slow turnaround to get everything up and running.

Q. How long did it take you to complete the process?

 It took us a number of months to actually complete the admin and without the help of the IFA guiding us through each stage it would have been more difficult. Now the scheme is up and running, however, the amount of administration we have to do each salary run is fairly minimal.

Q. What advice would you give to a business about to enrol in the scheme?

I would recommend setting up a work place pension scheme, not one member of our staff has opted out and it has been very well received. I would certainly seek some advice as we did and also look into the costs to your company in both monetary terms and time spent setting up the scheme itself.

 

Hotel giant Travelodge started auto-enrolling their employees on a workplace pension scheme in 2012. Neil Bayne, human resources director, Travelodge, tells us about response from the employees:

Travelodge sign in London

 

Q. What first steps did you take towards implementing a workplace pension scheme?

We started preparations at the beginning of 2012, over 18 months before going live. This involved setting up a steering group, comprised of stakeholders from within the business as well as from our pension schemes and our payroll software provider.

Q. Did you take help from external partners at all?

Bringing stakeholders together enabled us to foresee practical issues that needed to be addressed at an early stage. For example, we have two payrolls and a four-weekly workforce, and as such we appointed Scottish Widows and NEST, to provide the auto-enrolment pensions for these staff respectively.

Q. What reactions did you get from your employees?

As a result of early planning, we ran a very focused information campaign in the run-up to our staging date, and even had a small number of staff choosing to opt-in early.

We have since received a very positive response to auto enrolment from our employees since introducing the scheme in August 2013. It’s a very simple process that provides great long-term benefits for our employees, and we are delighted to be one of the UK’s first companies to have supported the initiative.

Now read:

Why you need to act NOW to automatically enrol staff into a pension scheme

Social Bookmarks