IPE.com

United Kingdom

September 13, 2007

BAA and Royal Mail have angered unions with planned changes to their respective retirement provisions. 

Airport operator BAA announced it will close its final-salary scheme for new entrants and provide a defined contribution, money-purchase scheme for new employees from 1 December.

Unite, the largest union at the company, criticised the step. 

"We do not think there is an adequate financial reason behind this decision," Unite regional officer Chris Jones said.

"Unite will oppose this step. We think it is unacceptable that new entrants will be on al less superior pension to other staff working at BAA." 

However, a spokesman told IPE it was "way too early" to talk about possible strike action.

BAA explained it will close the DB scheme to "protect itself and its pensioners from stock market volatility, which has recently exposed other large organisations to significant difficulties in terms of funding their pension schemes".

It added: "A money-purchase scheme for new members provides more certainty on the scale of the company’s contributions for several years."

Meanwhile, Royal Mail condemned renewed calls for strike action by the Communication Workers Union (CWU).

The union said negotiations that had taken place over the last five weeks "ended on Sunday without agreement". 

One unresolved issue is changes to the pension plain. 

The union claimed Royal Mail "virtually retabled the previous rejected proposal including a reduction in benefits, increased employee contributions and later retirement age". 

No details of the proposal were revealed.

Royal Mail in turn accused the union of wanting to "keep the scheme open to new recruits, even though it knows it will disadvantage the postmen and postwomen who already work for the company".

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