Auto-enrolment Case Study
24 October 2012
Carol Young – HEINEKEN in the UK
Pensions Manager
Some background
Carol Young
HEINEKEN in the UK
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Pensions Manager
HEINEKEN in the UK
•
UK’s leading beer & cider
producer
•
DC Plan:
launched in July 2011
c. 2,100 active members
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Heineken®, Foster’s,
Strongbow, Bulmers, John
Smith’s, Kronenbourg 1664
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DB Plan:
c. 41,000 members
£2.4bn assets
•
c2,100 employees across 7
main sites
•
1.2bn litres of beer and cider
p.a.
•
Managing 1,200 UK pubs
•
3 separate payrolls
Outline
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•
•
•
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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
The pensions challenge
2008: Heineken acquired Scottish & Newcastle
Existing DB Scheme
2009
2012
c. 42,000 members
c. 2,300 actives
£570m
Deficit
£1bn
Deficit?
£50m accelerated
contributions
Recovery Plan
Up to £61m p.a. additional employer contribs.
An unsustainable risk to our business
To do nothing was not an option!
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:
A “must do” business project
 Sustainable
Not an HR project
 Competitive in the market place
Top level buy-in & active involvement
 Centred on informed choice
 “Future Proofed” for Automatic
Enrolment
Engagement
Comprehensive and 2-way
Colleagues
Representatives
HR
Managers
Engagement
Realistic and measureable communication objectives:
Understand
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•
•
Why Heineken is
doing this
How it will affect me
How do I get further
information/support
Accept
Short term:
Medium/longer
term:
• Change is
inevitable but
• New DC is
Company support
valuable, fair and
remains
well governed
• Approach is well
• The need to take
considered
responsibility for
own retirement
• New DC is a quality
plans
scheme and flexible
Critical for meaningful engagement
Underpin all subsequent activities
Planning & engagement to launch
Gradual build, multiple iterations and follow-through support
2010
Q2
Q3
2011
Q4
Budget Setting &
Provider Selection
Holding Position &
Building Awareness
Organisational
Readiness
Q1
Q2
Q3
DC
Formal
LAUNCH
Consultation
Education
& Sign-up
Ongoing
support
Understanding
Acceptance
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
Take-up
94.4%
The overall take up rate
50
Only 50 colleagues from our DB  DC group chose not
to join
Contribution choices
<15%
Opted for lowest initial contribution
>70%
Started at highest contribution level or are tracking
towards it
Investment choices
Only 52
>11%
Colleagues defaulted to Balanced Lifestyle (didn’t tick
anything)
Chose core fund or full fund range
The Rest Made an active choice across 3 lifestyle profiles
• 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
Finessing the Engagement Strategy
Enrolling our population post launch
• 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
“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
“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
Steps remaining to staging date
We have a great base but there’s still work to do!
2012
Q2
Q3
2013
Q4
Q1
Q2
Payroll vs. provider
solution?
Design & agree detailed
processes & governance
Organisational
readiness incl/comms
Annual
renewal
Q3
HUK
Staging
Date
Final testing
Review
Preparation
Go Live
Learning
Next
Effective 2-way
communications
key to building member engagement and
confidence
Buy-in from
the very top
agreed objectives coupled to the right project
structure
Taking the
time
to build real understanding – crucial to informed
choice
Payroll set up is
key to success
start preparing early – will be a business wide
project