Royal Mail encouraged by 16% opt-out rate

[TrueBlueTerrier]

http://www.pensionsweek.com/DC-Auto-enr ... te?ct=true" onclick="window.open(this.href);return false;



Royal Mail has experienced a 16 per cent opt-out rate for its weekly paid employees, lower than company predictions but higher than some of the early staging companies.

Last month, the employer auto-enrolled more than 15,000 weekly paid employees, such as postmen, into its defined contribution pension scheme, out of 21,000 not previously enrolled. At March 1, the opt-out rate was around 16 per cent, the company has reported.

“This is lower than we had expected, but we will be monitoring whether this figure increases over the coming months,” said a spokesperson. “We are now rolling out the scheme to employees who are paid monthly.”

The company judged this opt-out rate a success, following four months of communication with members setting out the advantages and workings of
the scheme.

It has also created a telephone helpline and made sure refunds were automatically put into workers’ next weekly paycheque.

“Overall the response from employees has been very positive,” the spokesperson added.

Earlier this month, Asda reported an 8 per cent initial opt-out rate (PW 04/03/13), and calls to its helpline of only 3 per cent of employees, following a sustained communication campaign.

Now a further breakdown from the supermarket of its opt-out demographic appears to back up early reports that those closer to retirement may be more likely to reject a workplace pension.

“The average age of opt-outs is 47 which compares with the average age of those enrolled of 39,” said Steve Jones, pensions manager at Asda.

Robin Hames, head of marketing at Capita Employee Benefits, said long-term non-savers might be a “hard nut to crack” for schemes.

“If you have a hardened body of non-savers, it is going to be a longer communications battle to engage them.”

Even for those within the scheme, the next fight is to get new members putting away more than the minimum, he added.

[POSTMAN]

New threat to tax relief on pensions
Tax breaks on pensions will be under threat if the new national pension scheme fails to take off, a leading actuary has warned.

The Government will review the position in 2017. "If opt-out rates are 50pc or more, it is possible the Government will suggest removing the opt-out altogether and make pension saving mandatory," Paul Gilbody of BlackRock Investment Management said in a report last month...

http://www.telegraph.co.uk/finance/pers ... sions.html" onclick="window.open(this.href);return false;

[heapsy]

Mmmm interesting. Although it would still, in the long run, benefit the country and the government to offer tax relief to people. Tesco have made it compulsory to join their pension, although like others they have moved the NRA. It is now 67.

[RobertT]

Tax relief makes up a quite a big part of a typical pension pot, and any removal of it would mean smaller pension funds and ultimately even later retirement ages for the workers of this country.

Tesco have made it compulsory to join their pension, although like others they have moved the NRA. It is now 67.

Tesco workers will still be able to opt out if they want to just like anybody else who has been 'auto-enrolled'.

[heapsy]

Tax relief makes up a quite a big part of a typical pension pot, and any removal of it would mean smaller pension funds and ultimately even later retirement ages for the workers of this country.

Tesco have made it compulsory to join their pension, although like others they have moved the NRA. It is now 67.

Tesco workers will still be able to opt out if they want to just like anybody else who has been 'auto-enrolled'.

Not according to the bloke I know. It isn't the scheme the government have rolled out. This was brought in earlier than that. The change to NRA 67 took place from last summer and is different from the government scheme.

[RobertT]

It isn't the scheme the government have rolled out.

There are slight differences but it's basically the same! The main difference being that Tesco workers are being 'contractually enrolled' into the pension scheme and will have to 'cease membership' if they don't want to contribute. To be honest i'm not sure exactly what the difference is between that and auto-enrollment/opting out, but your mate can choose not to pay into the pension if he wants to.
More info here: http://henrytapper.com/2012/09/15/auto- ... ry-so-far/" onclick="window.open(this.href);return false;

This was brought in earlier than that. The change to NRA 67 took place from last summer and is different from the government scheme.

An increase in the NRA can happen at any time - ours increased to 65 in 2008 when the average salary plan began!
The only requirement for an employer is that they now have to offer a pension scheme to their staff, or will have to by 2017. The exact form that pension takes could be an existing defined benefit plan, an existing group personal pension or similar, or a NEST scheme. It is up to the employee whether they want to remain in the scheme or not.