Warburtons sees 2.3% auto-enrolment opt-out

Warburtons has had 2.3% of its auto-enrolled employees opt out of its trust-based defined contribution (DC) pension scheme, said Anne Hunt, pensions manager at the bakery, at the National Association of Pension Funds (NAPF) conference in Manchester on 17 October.

The bakery, which has 4,500 employees across 26 sites, auto-enrolled 1,800 employees on 1 May 2013. Fifty-five employees requested opt-out forms, but only 42 proceeded.

Warburtons began its auto-enrolment process 18 months before its staging date, drafting a project plan in December 2011. It also formed an auto-enrolment project team, comprising its pensions manager and its group reward manager, along with its pensions, payroll, HR and IT departments.

Following a review of its DC pension, which is provided by Fidelity, it opted to merely update its existing scheme.

In November 2012, it introduced a salary sacrifice arrangement to the pension, as well as changing its definition of pensionable earnings, reviewing its default fund and creating a new tier of pension contributions.

Employees can now choose between self-selecting their investment options from a range of six funds, or opting for one of two lifestyle funds. It has also introduced white labeling of investment funds and reviewed its annual management charge.

The communications process began at the end of 2012 when Warburtons appointed a pension champion at each of its 26 sites. These champions received a half-day training session about the pension scheme and auto-enrolment.

Its existing 2,700 pension members received a renewal letter in December 2012. Communications for non-members started in January 2013 with a teaser, followed by articles in the Warburtons magazine, a desktop and posters campaign and its formal communications in February 2013.

Only 20% of employees have computers at work, so it was important to communicate in a variety of ways, said Hunt.

In April, more information was provided about what auto-enrolment means to employees. Warburtons hosted presentations for employees at each of its 26 sites, alongside its pension provider Fidelity and its consultant KPMG. It produced a DVD of the presentation and followed this up with one-to-one clinics for employees.

Following auto-enrolment on 1 May, 22% (400) of employees made contributions choices above 1%. The average contribution from that group, including employer contributions, was 11%. Across its workforce, average contributions, combining employee and employer, are 6%.

A large number (350) of employees also made an investment choice: 43 opted to self-select, while 229 opted for the lifecycle 20 fund and 72 opted for the lifestyle 15 fund.

The next steps for Warburtons, according to Hunt, are around its member engagement strategy. One piece is around auto-enrolling new employees and the second piece is a focus on the journey to retirement.

Hunt advised: “Make sure you get all your stakeholders on board. It’s a pension project, but also has an impact on the other parts of the business.”