Heineken receives 95% voluntary sign-up to DC pension scheme
HR Editorial, September 13, 2011
Heineken, the beer and cider company, has achieved a 95% voluntary sign-up to its new defined contribution (DC) pension scheme - with 2,091 employees from an eligible 2,200 choosing to joining the Pension Quality Mark Plus accredited scheme.
The employee response exceeded typical sign-up levels for schemes of this type, and also saw a significant number of employees making active contribution and investment choices rather than falling into default options.
Heineken's new DC scheme launched in July for employees' future service and was designed to replace the previous defined benefit scheme. As part of a pension engagement programme, communications began a full year in advance, providing a high level of information and support around what many employees regard as a difficult subject.
A wide range of communication channels was used, including personalised support packs, DVDs, webinars, face to face presentations and management briefing packs. The initial phase emphasised the need for change in order to ensure the long term sustainability of pensions and included a formal 60 day consultation process involving the Heineken UK Employee Council. The implementation then saw a detailed communication programme on the new DC offering, together with wider pensions education.
Robin Pring, HR director for Heineken UK, said: "From a communication perspective, this project was particularly challenging. As in most companies, employees' understanding of pensions has never been high - but we were committed to encouraging everyone to make an informed choice about their future pension. The key was to provide information gradually, in very clear language and across a range of formats - recognising the fact that everyone has individual requirements.
We were pleased to offer a competitive DC arrangement, but it was great to see that 95% of colleagues joined the new scheme and, of those, all except 3% made an active choice regarding their investment options. This more than justified our commitment to such a comprehensive engagement programme."
The new scheme also gained the prestigious Pension Quality Mark Plus award from the National Association of Pension Funds - an independent stamp of quality for contributions, investment, governance and communications in DC pension schemes. As such Heineken UK was the first employer in the UK to receive this award before the new scheme was even launched.
Employees can choose to exchange from a base of 3% of salary and will be double matched by the company to a maximum of 10%. The scheme includes Death in Service Cover of 5 x pensionable salary; and Ill Health protection worth 50% of pensionable salary - plus 15% pension contributions until normal retirement date.
The new DC scheme was launched on 9 July 2011 and is provided in partnership with Standard Life.