Balfour Beatty Defined Pension Fund - Proposal to Cease Future Accrual
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BALFOUR BEATTY DEFINED BENEFIT PENSION FUND – PROPOSAL TO CEASE FUTURE ACCRUAL
The RMT have been informed that management are proposing to cease future accrual in the Balfour Beatty Defined Benefit Pension Fund (BBPF) and offer employee’s membership of the company’s inferior Defined Contribution Pension Scheme for future pensionable service.
What this will mean to members is that the benefits they have already built up are protected but they will not be able to build up any future benefits in this scheme.
Please be advised that the BBPF is not a section of the Railways Pension Scheme and therefore does not affect members of this pension arrangement.
This proposal is being made as a result of deficit in the fund which is estimated to be in the region of £415 million. Management claim that the employer is unable to continue to fund the BBPF because of the downturn in business and the negative impact the deficit recovery payments are having on the financial position of the company.
The RMT are more than aware of the financial implications many employers find themselves under as a result of funding schemes like the BBPF, however, it is not acceptable that workers deferred pay is sacrificed to balance the books. Management’s proposal is nothing more than a blatant attack on member’s future pension benefits.
While management are proposing to offer employees an alternative pension arrangement in the shape of a Defined Contribution scheme, these types of investment based provisions are not a substitute for a Defined Benefit arrangement which is based on a member’s salary and pensionable service.
While management may claim that this proposal makes good business sense it is nothing more than an attack on members’ employment conditions and will leave members financially worse off at retirement.
In line with legislation management are intending to begin a 60 day consultation period with members and their trade union representatives regarding the pension proposal. It is also proposed to run simultaneously a further consultation period as result of this change being a significant alteration of member’s contacts.
Management will be seeking members consent to make these changes and those who refuse will see their contact of employment terminated and a new one issued to them. This is totally unacceptable and the RMT will be taking the necessary action if management carryout this proposal.
The RMT will be writing to the other trade unions recognised at Balfour Beatty and calling for an urgent meeting to begin a campaign to keep this scheme open for future accrual.
I will keep you informed of developments.