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Simon Cumpsty, Head of Employee Relations and Reward : An Auto- Enrolment Story

Simon Cumpsty, Head of Employee Relations and Reward : An Auto- Enrolment Story. Introduction to Dairy Crest. Dairy Crest is the number one British owned dairy company Market capitalisation: £650 million Previously owned by Milk Marketing Board

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Simon Cumpsty, Head of Employee Relations and Reward : An Auto- Enrolment Story

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  1. Simon Cumpsty, Head of Employee Relations and Reward : An Auto- Enrolment Story

  2. Introduction to Dairy Crest • Dairy Crest is the number one British owned dairy company • Market capitalisation: £650 million • Previously owned by Milk Marketing Board • Floated on London Stock Exchange 1996, turnover £750 million • Since flotation turnover has increased to £1.4 billion, reflecting strong growth in added-value sales • Pre-tax profit 2012/13 £50.6 million • 2013 – Only food manufacturer to achieve BITC corporate responsibility platinum ranking (98%) and highly commended as company of the year

  3. Dairy Crest today • Dairy Crest is the UK’s leading British owned dairy company manufacturing and selling: • a strong portfolio of dairy foods brands in the UK • fresh milk to UK retailers, middle ground customers and residential customers • We have 13 manufacturing sites in England and Wales: - 4 milk processing sites (3 retailer and 1 doorstep) - 1 cream site - 3 cheese sites - 2 spreads sites - 2 other food and ingredients sites - 80 doorstep delivery depots • 4,800 Employees • 1,300 Self – Employed Franchises • Dairy Crest is one of the largest purchaser of milk in the UK, buying around 1 in every 6 litres produced. Direct contracts with 1,200 dairy farmers

  4. Site Map

  5. Dairy Crest Foods – strong British brands • Focus on 4 key brands – other brands include Utterly Butterly, Willow and Vitalite • Momentum maintained through innovation, advertising (TV) and promotions

  6. Dairy Crest : Past and Current Pension Arrangements Defined Benefit (Final Salary Scheme) – Closed April 2010 • Contribution / Accrual Rates : 40ths, 50ths and 60ths • 7% Employee Contributions • Life Cover : 4 x salary plus Spouse and Dependents Pension • Ill Health : Full and Limited Incapacity Pensions Defined Contribution (Zurich Stakeholder Scheme) – From 2006 • Contribution / Accrual Rates : 1:2, 1:1.5, 1:1.25 • Life Cover : 7 x salary • Ill Health : Group Income Protection Scheme (GIP’s) for a 2 year limited period • Additional benefits if contributing a minimum of 3% up to a maximum of 8% • In replacing DB Scheme with a DC Scheme replicated additional benefits as far as possible • Pension key part of Dairy Crest’s reward offering

  7. Dairy Crest : Impact of Auto-Enrolment To Date Opt Outs and On Costs • From end of January 2013 main section of Stakeholder Scheme closed for all employees (except Band 5 and above new starters and promotions) until April 2014 • April 11th – 1228 Employees enrolled • April 25th – 1203 Employees enrolled • 235 Employees opted out as at end June • 9.67% Opt Out Rate • Majority of those opting out monthly paid • Average run rate of additional Employer contributions • £5,913 per week • £21,751 per month • £568,488 Annualised

  8. Dairy Crest : Auto-Enrolment Communications and Implementation Approach • Agreed with elected and constituted PCCF (Pensions Communication and Consultation Forum) • Low key • Last opportunity given to join main section without 12 month wait • Very different to 2010 • Role of effective Governance group key • Defined Disputes process • Guaranteed representation of Trade Union including National Officer • 3 Company Appointed Representatives • Supporting on line financial planning tools and pre-Retirement education

  9. Dairy Crest : Auto-Enrolment Impact on Reward • Lower annual pay award • Relaunch and reinvigoration of Voluntary Benefits offering • Over 35% workforce registered and using regularly • Low Opt Out Rates lead to review of and agreement with PCCF on matching and additional benefits from April 2014 • Mitigate Risk and Cost exposure • Balance best benefit provision with minimising cost

  10. Dairy Crest : Auto-Enrolment Moving Forward • Review impact of Trading Up in April 2014 • Opportunities to link Trading Up and additional benefits to possible flex arrangements • Pension proposition remains a key part of our Benefits offering • Fits with our Culture and Values

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