United Response sees 3.6% auto-enrolment opt out

EXCLUSIVE: Charity care provider United Response has seen opt-out rates of 3.6% following the implementation of auto-enrolment.

Only 52 of the 1,451 employees who were auto-enrolled on 1 October 2013 opted out of its stakeholder pension scheme, which is provided by Friends Life.

The organisation now has 2,618 of its 3,500 employees enrolled in the pension scheme.

Diane Lightfoot, director of communications and fundraising at United Response, said the low opt-out rates were attributed to the fact that the organisation is not requiring employees to contribute to the scheme until 2018.

She added: “We are not requiring any of our employees to contribute at the moment so the only contribution is from us. We are contributing 5%, which is above the legal minimum, until the rate goes up to 8% in 2018.”

In 2018, employees will have to contribute 3% of their salary into the pension. Lightfoot added: “On 1 Oct 2018, when the minimum total contribution legally required goes up to 8%, we will still contribute 5%. From this point, employees will need to contribute 3% to reach the 8% total.”

Employees can opt to make additional voluntary contributions into the pension.

United Response postponed its staging date from 1 July to ensure it had more time to communicate the changes with staff. Lightfoot believes the extra time helped to engage employees with auto-enrolment.

It worked with Friends Life and Barnett Waddingham to ensure its communications were simple, well planned and tailored to fit its out-of-office employees.

She said: “It allowed us to tailor the communications, but the vast majority of our front-line workforce had an initial reaction that auto-enrolment would cost them money and affect their pay packet.

“The knee-jerk reaction was to opt out. Our communication included telling them that they can opt out, but there was really no benefit of doing so. We told them: ‘We are giving you 5%, and you don’t have to pay anything’.

“I am delighted that the message got across because it is very difficult to reach people out in the field who are not stuck at desks. I think it’s been a success.”

Going forward, more employees will be auto-enrolled as they become eligible, in terms of age and earnings.