UK - Rolls Royce workers will have to "take most of the pain" for keeping their final salary scheme open.
The firm wants scheme members to pay 75% of the costs needed to plug a £1.3bn FRS17 deficit in the £3.2bn Rolls Royce Pension Fund.
Workers expressed fears in June that the firm would shut the scheme because of soaring costs. But Amicus AEEU – the union heading discussions – says the firm has since committed itself to keeping its final salary scheme open.
As part of the arrangement Rolls Royce wants members to pay for the majority of the increased contributions needed to help plug the £1.3bn deficit. It also wants to raise the retirement age for employees, bar workers from taking early retirement and change the way members’ final pensionable salary is calculated.
Amicus head of pensions Julian Richards said Rolls Royce could afford to put more money into the fund. “Basically, the employer is saying we should share the pain. But its definition of sharing the pain – which it has basically admitted – is that we pick up 75% of the costs and it pays 25%.
“We don’t think that is sharing – that’s transferring pain.”
A statement by Rolls Royce said: “The group is currently undertaking consultations with employees over a number of mitigating actions in connection with the provision of pension benefits.
“The objective of these actions is to contain the additional funding costs within the guidance previously provided.”
The firm runs two other UK-based schemes, the £554m Vickers Group Pension Scheme and the £893m Rolls Royce Group Pension Scheme. Both are due to have actuarial valuations conducted in March and April 2004 respectively.
The firm said that while the last valuations showed that they were in surplus, it has started talks with workers aimed at capping the growth in the larger scheme’s liabilities.
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