BMW faces union backlash over DB closure plans

Michael Klimes
clock • 1 min read

Unite has vowed to fight “tooth-and-claw” against BMW’s proposal to close its two defined benefit (DB) schemes to future accrual from 1 June 2017.

The plan, if implemented, would affect the German car maker's 5,000 UK staff, all of whom would then join the firm's defined contribution (DC) scheme set up in 2014.

BMW has launched a 60-day consultation period which begins on 29 September with letters being sent to members on 26 September.

Unite is planning to hold a consultative ballot to gauge roughly 8000 members' opinions during the next few weeks about whether further action will be taken.

National officer for the automotive industries Tony Murphy said: "It is clear that our members will be losing thousands of pounds a year in retirement incomes, if this proposal is allowed to go ahead.

"This is plainly unacceptable and Unite will be fighting this proposal tooth-and-claw. It is becoming increasingly too easy for highly profitable multi-national companies to energetically salami-slice workers' pensions in pursuit of even greater profits.

BMW has two DB pension schemes.

The largest is BMW (UK) Operations Pension Scheme which has 5,173 active members, 17,099 deferred members 53,029 pensioners.

It closed to new members in July 2013.

The smaller BMW (GB) Employee Benefits Plan has 215 active members, 450 deferred and 220 pensioners.

The DC plan has over 2,000 members.

A BMW Group spokesman said: "Many UK companies have significant pension fund shortfalls in their defined benefit schemes and the cost and risk associated with these schemes is making them increasingly unsustainable and unaffordable for both members and companies.

"BMW Group has always prided itself in providing excellent pensions for its staff and wants to act now to protect future pension provision for all its staff and to help protect the cost competitiveness of the UK as a manufacturing base. The company is now consulting with its employee representative bodies on this proposal."

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