UK - Staff at British Gas and the AA are increasing their pension contributions to keep their final salary schemes open to new members.
The GMB union believes this is the first time existing members have “disadvantaged themselves” to benefit new entrants.
British Gas and AA are both owned by Centrica Group, which offered staff the opportunity to vote on the future of its three pension schemes for new entrants.
GMB pensions officer Cath Unsworth claimed the firm had intended to close all three schemes to new entrants due to concerns over FRS17 and cost stability. “The ballot was part of a compromise,” she said.
All 28,777 members of the Centrica Engineers, AA Staff and Centrica Staff schemes were balloted.
British Gas staff – part of the Centrica Engineers’ scheme – voted 80% in favour of raising their current contributions of 4% to 5% to keep it open for all new entrants.
AA employees voted 93% in favour of raising their contribution level from 5% to 6%, thereby keeping the AA Staff scheme open.
But the 13,000 members of the Centrica Staff scheme – the biggest of the three schemes – voted against an increase in contributions.
Only 19% said they would pay extra contributions to keep the scheme open.
This scheme will now be closed to new entrants from April 1 with employee contributions unchanged at 4%.
GMB national officer for energy and utilities Brian Strutton added: ”This compromise reflects the reality of the current pensions crisis.
“The additional 1% saves future generations of engineers and patrols from becoming pensioner paupers.”
Centrica spokesman Andy Turpin said: “The outcome is good for all concerned. Employees have had their say, which we will abide by and get cost savings at the same time.”
He added that the group was against the switch to DC and pointed out chairman Michael Perry has said that it is wrong for companies to shift the stock market risk on to employees.
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