CBI conference 2014: Facilities provider OCS Group profited from the statutory three-month auto-enrolment postponement to find solutions to its tricky work patterns and variable earnings, when it staged last year.
Under auto-enrolment legislation, employers are able to bring forward or defer their first auto-enrolment assessment by up to three months, and many seized the opportunity for extra preparation time.
Streamlining auto-enrolment
OCS Group is a facilities provider with 26,000 employees working across thousands of sites, so auto-enrolment posed a significant challenge. Prior to auto-enrolment it had 43 payrolls and 13 pension schemes. “This was a great opportunity to consolidate some of that,” said Drysdale.
More complexity was added by the nature of the company’s work, which required regular use of transfer of undertakings – or Tupe – regulations, where employees are transferred in and out of the group to temporarily work for other companies. A fifth of the firm’s employees move in and out through this process each year.
OCS's auto-enrolment implementation group engaged with its employer partners to ensure it could recoup the cost of auto-enrolment, which was anticipated to be £1.4m, Drysdale added.
The company also made use of focus groups to communicate with its employees, most of whom do not use email and many of whom speak English as a second language.
“We were concerned about the number of people who would trigger eligibility and then drop out,” Jane Drysdale, HR director of OCS group told delegates at Thursday’s CBI Pensions Conference 2014.
“We wanted the simplest possible solution so we went for postponement and three months’ average earnings,” she added.
Postponing auto-enrolment can buy companies valuable time to come to terms with the changes, but schemes risk difficulties if they do not use the time wisely.
“The key thing is having the extra time to think it all through and plan it,” said Toby Strauss, CEO at Scottish Widows, but warned: “It can be used as a reason to do nothing and forget about it for three months.”
The use of focus groups was one of a number of strategies used by OCS. The research was carried out as a series of workshops to educate contract managers and HR teams.
OCS set up a telephone hotline to answer questions, but few employees called.
“We were concerned about this at the time and I’m still concerned about the level of engagement within the whole process,” said Drysdale.
The employer saw fewer than 10 per cent of staff opt out, but received very little feedback or interaction from its new savers.
The next stage of the company’s auto-enrolment strategy will be to push face-to-face engagement and education for its customers and employees.
Despite opt-out rates being below what was expected prior to the reform, some industry experts are concerned about the level of engagement seen among employees, which is viewed as crucial to keep staff in schemes when contribution levels rise.
“The opt-out rates are encouraging but communication is still important,” said Lena Levy, head of labour market policy at the CBI. “A lot [of employees] are still not making the most of the maximum amount of contributions they can get so we really need to raise awareness.”
