Transitioning to a defined contribution plan from a defined benefit arrangement is hard enough during the best of times. But when the organization is a company like Coca-Cola Ltd., size can be an added complication.
“Encouraging employees to take action is not easy,” said Martha Callum, senior director for total rewards at Coca-Cola Refreshments Canada, during a session at Benefits Canada’s Defined Contribution Plan Summit in Montreal in February.
The challenges facing Coca-Cola as the June 30, 2017, closing date of its defined benefit plan approached were significant. The company has 6,300 employees spread across six manufacturing plants and 65 facilities throughout Canada. It has three employee populations — salaried, hourly and unionized — and manages 33 collective agreements and six different pension plan designs.
Among the issues was the fact that although Coca-Cola’s plan was highly attractive, with contributions potentially reaching 14.5 per cent of salary, the company needed to obtain the consent of existing employees to deduct the two per cent minimum required. To encourage employees to participate, Coca-Cola staff used a variety of materials that targeted different groups of employees according to the particularities of their pension plan design, as well as employment type and status. The materials included personalized direct mail, transition guides, case studies, webinars and documents addressing frequently asked questions.
According to Callum, however, the most effective strategy was to leverage company managers as agents of change. The process started at the top, with Coca-Cola’s president agreeing to provide a face to the message. After that, senior managers participated in personalized briefings about how the changes would affect their own pensions, said Callum.
The approach allowed them to raise any questions and become comfortable with the changes before they went out to speak about them with their own employees. According to Callum, the results exceeded the company’s expectations, with 92 per cent of employees actively enrolling in the new defined contribution plan.
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