If I had a vote for “pensions personality of the year, I’d give it to Wendy Taylor of Morrisons and I’d give her understudy Claire Ramus a “highly commended”! They’ve inspired their Board, their staff and they’ve brought a breath of fresh air to the stuffy room in which us pension people have been spending our time!
The point about Morrisons is not just what they did or even how they did it. The biggest learning point is that they looked at what appeared to many a threat to their business and turned it into an opportunity to build value for its business.
Neither Wendy or Claire are “pensions people” and at times, they looked uncomfortable at the NAPF’s Pensions Connections seminar. Claire looked quite insulted when I suggested she knew rather more about pensions than she was letting on. There was an audible intake of breath when Taylor claimed never to have opened the Pension Regulator’s “Employer’s Duties” tome, not least from Liz Wood, her pensions lawyer from Wragge & Co.
Not only are this lot not stuffy pensions people…it’s worth noting that with Frances Corbett of the NAPF, ably chairing the event and Wendy’s boss Karen Caddick a virtual presence, this was an entirely female programme ….and all the better for it.
So what did we learn?
Firstly, Morrisons are sitting pretty, they now have some 14,000 in their cash balance Defined Benefit Plan (Wendy Taylor) with some 8,500 of them opting in since the plan went live earlier in the autumn. Wendy estimates that there are some 60,000 eligible workers for the plan so take up is now closing in on 20%. Wendy mentioned that while it is not a target, it’s an ambition to get the fourteen to forty by the end of the first three year cycle which means a take up by this time 2015 of 70%.
This is why she is confident and this is some of the best news for auto-enrolment, I have yet heard. Of the first wave of those auto-enrolled, the 3000 new hires in October, less than 10% have opted out, Wendy gave us numbers-
56 -Day one
42 -Day two
36 -Day three
19- Day four
20- Day five
Those who have opted out have done so , as Legal & General suggested last week, using digital technology, not paper nor the phone. Wendy mentioned that of the 8,500 opt-ins received by Capita (the DB administrators) only 2-300 had been manually processed. So digital technology is not just being used to “get out”, it’s working for those “getting in”.
I would be very surprised if all this is happening through works computers or even laptops, Wendy is going to check the source, but I’d be surprised if most engagement and transactions is not originating from the smartphones (especially for in-store staff).
Returning to the central theme, if Morrisons only lose 10% of those they auto-enrol, then over a 3 year period when some 100,000 people will join the company, we might expect the current take up to improve from <20% to the ambitious 70%.
Wendy mentioned that the old grey whistle test for design and communication issues had become “does it work for Wendy”.
I think this is called leadership.
Wendy used herself in the installation process as a proxy for the hundred thousand staff who will be impacted not just by auto-enrolment but by the wider workplace education programme they have introduced “Save your dough” . Click on the link to discover a Christmas wonderland of financial tips and a flavour of the incredible educational program Morrisons have offered their staff (and us – this is the most popular link on www.henrytapper.com !)
When I tweeted these numbers last night I got a number of replies frankly disbelieving what people were reading. I have no doubt the numbers are right and will continue to be right and let me point out five reasons “it worked for Wendy” which we could all learn from.
- Morrisons have worked out that pensions matter for them as a business. It’s not just a PR thing that gets them on the right side of Government, unless they can get their staff saving into good things, they will have in 10-15-20 years skint “colleagues” who cannot afford to leave the workplace.
- Morrisons have worked out that auto-enrolment is only part of a process, The big picture is that staff know how to “save their dough” (this is why opt-outs are so low)
- Proper planning is essential. Wendy outlined the various workstreams including IT, comms and education and provider selection but emphasised the importance of “business integration”.
- The process must not disrupt the other activities of the business. Auto-enrolment has been introduced into Morrisons in a business as usual manner. Wendy mentioned that if she could do it again, she would concentrate more on the final point but it looks to me, from when I shop in Brentford, that both Save your Dough and the staging of auto-enrolment are now part of the furniture.
- Wendy was keen to offload the glory onto her team, and what a team. I’d certainly want Liz Wood as my lawyer, Paul Sturgess and the Capita administration team are people of the highest calibre and the same can be said for Martin Freeman and his team at JLT. Of course getting the best people working around you doesn’t happen by accident, but in the gloom the gold gathers the light about it!
There is of course a sixth reason this worked and that’s because Morrisons wanted it to. It seems that the company got all its board lined up behind Wendy and the governance of the process seems to have been inclusive (a wide steering group meeting monthly and a working group meeting weekly). You only get that level of buy-in by showing an abundance of leadership.
Anyone who has seen Wendy talk (or Claire speak on her behalf) can sense the leadership and the goodwill it has engendered. I have spoken all year about Popcorn Pensions, about making savings and pension savings worthwhile and fun. Morrisons are the real deal and hats off to them, they are showing me the way forward and hopefully my enthusiasm for their solution has rubbed off on you.
Their job is only a fraction done. Wendy may be marching her troops to the top of the hill but she’s going to have to march them down again. She’s got the cash delivery mechanism sorted but now she needs to make sure her staff buy their pensions wisely.
There’s the challenge for all of us!
- Tesco v Morrisons – a pension-enrolment showdown (henrytapper.com)
- Morrisons opts of of ‘auto-enrolment’ scheme (telegraph.co.uk)
- Morrisons delays start of ‘auto-enrolment’ pension scheme (telegraph.co.uk)
- The public sector needs a low cost pension alternative (henrytapper.com)
- Thousands of workers face pension cut (telegraph.co.uk)
- Is auto-enrolment working? – November Play Pen lunch (henrytapper.com)
- What do we mean by good? (henrytapper.com)
- Can we get our business leaders to bother with pensions? (henrytapper.com)
- Is there future for defined benefit pensions? (henrytapper.com)
- L&G’s AE membership self-serving with hand helds! (henrytapper.com)