BT joins with unions to win back 83% of opt-outs
BT has seen 83 per cent of workers who had previously opted out of its defined contribution scheme sticking in the plan after being auto-enrolled in November, following the employer’s work with unions to drive take-up.
The company, which has always put new staff into a pension plan, auto-enrolled 2,300 previous opt-outs into its Standard Life-run BT Retirement Saving Scheme. Of those, only 400 have so far chosen to leave.
A further 70 per cent of those on flexible retirement also returned to workplace saving in another arrangement offered by the employer. The communications company now has nearly all employees enrolled in a scheme, according to its head of pensions Kevin O’Boyle.
“We’ve always had auto-enrolment in BT, so we’ve always had the majority of members in a pension scheme. From that point of view, like a lot of others, we’ve had very high take-up,” he said.
The company took a low-key communications approach and waited until a month before its staging date to reach out to members. This involved writing to the different categories of employee and working with union representatives.
“Now that everyone is in, our next phase is to keep on bombarding them with information until they think, ‘If I actually do something maybe they’ll stop nagging me’,” said O’Boyle.
There were another 5,000 employees who had taken flexible retirement and were drawing their defined benefit pension, but had continued to work. This cohort was put into the National Employment Savings Trust.
O’Boyle added: “They’re not the main audience for auto-enrolment but we actually auto-enrolled those people as well. About 3,500 of the 5,000 started up a pension scheme again.”
Although many large employers had an auto-enrolment process in place by the kick-off of the reform, some have still faced difficulties.
Chris Noon, partner at consultancy Hymans Robertson, said the main issues were payroll providers coming late to the market with their products, and early-staging companies feeling “in the dark” about auto-enrolment legislation and guidance.
“For those reasons it has been much harder for larger employers than it would be for some of the smaller employers that will adopt auto-enrolment over the next year or so,” he said.
But Noon said added communications by larger employers generally do not need to be as labour-intensive as that of smaller companies, as bigger organisations usually have strong resources in this area already.
Earlier this month BT revealed it was reviewing its contract-based scheme, with a view to possibly making changes to its default lifestyle option. O’Boyle said that the company is keen on pursuing a diversified growth fund approach.