Talking exclusively to Annie Hayes Lis Browning explains how Woolworths is reacting to the recommendations of the Turner report and reveals just how much staff at the organisation are saving towards their retirement; Browning will be speaking at the Employee Benefits Exhibition and Conference being held at the Armitage Centre, Manchester from 26th to 27th April 2006.
HR Zone Q1: Why should delegates attend your talk on dealing with the pensions crisis?
Browning: Attending gives delegates the chance to hear what another employer is doing and share a different viewpoint and approach.
HR Zone Q2: What impact have the recommendations of the Turner report had on employers and employees?
Browning: Everyone is waiting for more legislation, complexity and cost. It’s a slightly cynical view, but very prevalent.
HR Zone Q3: Can the psychological contract between employees and employers ever be repaired now that the pensions promise has all but disappeared?
Browning: Yes, by educating and demonstrating how the responsibility can be shared. Employees still want to have this link.
HR Zone Q4: Is there any link between pensions and productivity?
Browning: Definitely. The more valuable the benefit the higher the link. In our industry sector (retail) where pay scales are broadly similar having a final salary plan makes the package hugely more attractive and valuable. In industries where pay and cash/bonuses have a bigger variance this is probably of less value.
HR Zone Q5: Can HR turn the pensions problem to its advantage?
Browning: HR are only part of the picture in promoting benefits. The specialist areas such as reward have a huge part to play.
HR Zone Q6: What part do pensions play in the reward mix and are they now more of a hindrance then a help?
Browning: They’re a tool which can still be used to advantage, but it needs a skill set that’s not always available in-house. There needs to be more availability of solutions from consultants at a reasonable price. Perhaps with more openly shared solutions.
HR Zone Q7: Your talk comprises a case study – what experiences has your business had of handling pensions?
Browning: Following a demerger, sale, restructuring and joint venture, the experience is wide and broadly positive. It is seen as a vital part of the success. Woolworths was spun off from Kingfisher in 2001 and had to establish a mirror image pension and keep it for two years. In 2004 we reviewed and retained the final salary with changes. We did two TUPE transactions for the payroll function to Ceridian and the in store cafes to Compass group. The BigW format was restructured to out of town. Street on Line were restructured under Woolworths and we have since gone to the Regulator for a withdrawal agreement. We did a joint venture with BBC World-wide and created 2entertain. Finally we sold MVC to the Argyle Group.
HR Zone Q8: Has the businesses attitude to pensions changed in reaction to recent events such as the Turner findings?
Browning: We’re waiting to see if the dumbing down base contributions (3%) means a wholesale move away from employer provision.
HR Zone Q9: Are employees doing enough to help themselves when it comes to saving for retirement?
Browning: They want to, but are scared with all the past problems. They also need to understand how much is needed.
HR Zone Q10: In your experience are employees saving enough?
Browning: With a contributory scheme and 25% of members making AVCs on top of this it certainly seems as though this workforce is trying.
HR Zone Q11: What are you final thoughts in relation to the pensions dilemma?
Browning: Hindsight is a great thing. Because pensions have been long term and politics short term there is a constant ‘fudge’ and ‘moving of goalposts’. It will take a brave government to change this.
