Virgin Management Limited (VML) is the home of Virgin, supporting the Branson family and the growth of the companies comprising the Virgin brand. VML’s Reward Team looks after a diverse range of employees across the group of companies meaning that there is no ‘one size fits all’ approach to pensions and benefits.
Being a complicated corporate structure, VML’s biggest concern when implementing auto-enrolment (AE) was ensuring each entity was compliant with the legislation. VML’s staging dates started 18 months after the largest UK companies, so they understood the risks of non-compliance.
One of VML’s priorities was to ensure that each group company staged at the same time, meaning that 7 staging dates were harmonised to April 2014. This meant that VML did not have to worry about a staggered AE implementation, reducing the overall level of administration, which delivered greater efficiencies and cost savings across the business, and providing a more consistent message to employees.
When it came to choosing a solution, VML initially considered managing AE in-house through their own payroll solution. However, whilst a payroll provider could meet the assessment requirements, it did not comprehensively address engagement around AE and automate communications, statutory or otherwise.
It was quickly decided that a middleware option, which would holistically manage the AE processes, would provide the best solution.
After careful review, VML chose Thomsons Online Benefits as their AE provider. VML were already using Thomsons’ benefits platform, Darwin™, and Thomsons understood the VML business, particularly its complex corporate structure and diverse employee population. Unlike other providers, Thomsons was willing to be flexible and meet VML’s complex requirements.
Engagement formed a core part of the Thomsons proposition. Thomsons offered a comprehensive programme of communications, from automated email campaigns and posters, to roadshows and pension surgeries, in order to engage employees. VML believes it is their responsibility to educate staff so they are better prepared for retirement and have a greater chance of achieving a meaningful retirement.
Following a 3-month postponement period, VML staged smoothly and successfully in July 2014. As a result, pension scheme membership rose to 81%, from 26% prior to AE.
Only 6% of auto-enrolled workers opted out, compared to the national average of nearly 12%, and 40% of employees actively contribute at a rate higher than the AE minimum.
VML has already started planning for the next step of AE, including reviewing company contributions to ensure they remain competitive. Although 90% of employees are now part of the pension scheme, VML is working with Thomsons on various campaigns for this next phase to actively engage employees and to improve pension outcomes for members.
Unlike other providers, Thomsons were willing to be flexible to meet the different requirements of each of the operating companies that we looked after. Because of this flexibility, we were able to get excellent economies of scale that other providers could not offer.
Auto-enrolment opt-out vs 12% national average
Auto-enrolment staging dates harmonised to one date
Pension scheme membership vs 26% prior to AE
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