UK - The fate of more than 500 shipbuilders' pensions is hanging in the balance following the sale of Appledore Shipbuilding.
The firm’s new buyer, Dev-onport Management, is in talks with workers and union officials to decide whether it will take on the £21m defined benefit scheme which had an FRS17 deficit of more than £1.3m in March 2001.
If Devonport – the owner and operator of the Devonport Royal Dockyard in Plymouth – fails to do so, members will lose up to 80% of their entitlements.
GMB pensions officer Emily Thomas said: “We are in discussions with the buyer to ensure both existing and new members’ benefits are protected. It is important that the company knows how important pensions are to these people.”
Insiders say it is unlikely Devonport will merge the Appledore scheme – which is part of the Shipbuilding Industry Pension Scheme – with its own final salary arrangement because it is closed to new entrants.
Unions, though, hope the firm will set up a new pension arrangement to ensure staff savings are retained.
Devonport spokeswoman Wendy Smith said it was “too early” to say what action the company would take because it first needed to secure ongoing shipbuliding contracts.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.