The company set up its auto enrolment scheme in April 2013, following the closure of its existing stakeholder scheme. Existing members were given the opportunity to join the auto enrolment scheme in April 2013, with the first 12 months of contributions paid at the statutory level and then “trading up” to a maximum matching contribution of 8 per cent employee and 10 per cent employer.
When Diary Crest staged in April 2013, 2,411 staff auto enrolled, 238 opted out (as at end June 2013), the average employee contribution was just over 6 per cent on average, with a roll out rate of around £500,000.
Cumpsty said: “It’s been challenge in terms of the overall reward package and will mean a lower annual pay round.”
The company has relaunched its voluntary benefits and over 35 per cent of the workforce are using the online tool regularly.
He said that low opt out rates meant that the scheme’s agreement with its Pensions Communication and Consultation Forum (PCCF) on the matching contributions and additional benefits, that will be available from April 2014, would have to be reviewed.
This might mean introducing a flexible benefits package as the company could not afford to pay an average contribution of 7.5 per cent for everyone who had auto enrolled.
Speaking from the floor, Henry Tapper asked: “Is the message going out to unions that you will only get a pay rise if there are a lot of opt outs?”
Cumpsty said that providing total benefit statements would help deal with the problem in a “realistic way.”
