To prepare for auto-enrolment, FirstGroup is making changes to its pension arrangements and focusing on employee engagement.
The company’s staging date is April 2013, when staff will be auto-enrolled into a new defined contribution (DC) scheme offering phased contributions which will reach 5% for both employer and employee. Until then, new members will continue to enrol into the transport operator’s defined benefit (DB) pension scheme.
FirstGroup has begun developing a website which will have tools to enable staff to establish their risk appetite and tolerance. They can either use a pre-packaged diversified investment strategy appropriate to their risk appetite and age, or make bespoke investment choices.
The firm has yet to finalise its auto-enrolment communications, but John Chilman, group reward and pensions director, says conveying the changes in a positive light is a priority. “We do not want colleagues to think of auto-enrolment as a tax. For many, they will gain much more immediate access to pensions.
“We will explain that this is a valuable benefit, and even more so if they stay with FirstGroup and can then move into the DB section. However, they have to do nine years in the DC section to get this option.”
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