BMW to close DB scheme to new members
BMW Group UK is consulting about closing its final salary defined benefit (DB) scheme to new members, amid rows with unions.
Launched this week, the consultation will look at providing non-members with a group personal pension (GPP) instead. The contract scheme is already used in some subsidiaries of the group.
The DB scheme has just over 5,000 active members with 19,000 deferred and 56,000 pensioners.
The group said the decision was not made in light of auto-enrolment (AE) as provisions were previously agreed for its staging date, which is next week. Closing to new members was more about its UK operations remaining competitive, it said.
A spokeswoman added: "This is about making sure we can offer future employees a valuable pension at a cost we can afford and predict. It is in line with our worldwide strategies to offer defined contribution (DC) and this is only a consultation about closing the scheme to new members."
Union Unite said if BMW push ahead with the closure it will not rule out balloting for industrial action, despite months of negotiation.
Unite national officer Roger Maddison said BMW had failed to convince the union that closing to new members would not lead to an attack on existing employees' pensions.
He added: "Unite will not stand idly by and allow a cash rich company, which is a major success story in the UK, threaten our members' futures. Strike action cannot be ruled out if the company insists on this change without securing a negotiated settlement with copper bottom guarantees."
BMW said it has not yet closed the door on negotiations with Unite and had invited the union to attend further discussions at its earliest convenience. The company stressed no decision had been made on the closure and it was still open to discussion.
The consultation will involve unions, members and staff and lasts the statutory 60-day period. BMW said it was too early to gauge the reaction of the consultation from staff members.
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