Stagecoach Group Pension Scheme

Circular No. NP042/06

6th April 2006

Dear Colleague,

Stagecoach Group Pension Scheme

With reference to my Circular of 23^rd March, on 29^th March, the General Grades Committee considered a report on management's proposals and the following decision was recorded:

"That we express with grave concern the company's proposals to close the Final Salary Scheme and introduce inferior arrangements for existing employees and new recruits. We note that a further meeting with management will take place on 6^th April, 2006. We refer this matter to our National Sub-committee for examination and report and await further developments."

A further consultation meeting was held with Stagecoach employer representatives earlier today where following discussion they were advised that their proposals were unacceptable. As a consequence RMT and TGWU representatives agreed the following statement:

"In a further consultation on 6^th April, the employer notified the joint Unions of their intention to implement major detrimental changes to the pension scheme. The joint Unions responded as follows:

The joint Unions were not prepared to see the final salary scheme replaced, or closed to new entrants. The Unions intend to defend what we have and not pay more for less as we are being asked to do.

The company confirmed it is in a sound financial position sufficient to meet any deficit in the pension fund.

It is the intention of both Unions to report to their delegate conferences at the earliest opportunity."

I shall keep you advised of developments.

Yours sincerely,

R. Crow

General Secretary