Pension talks at Rolls Royce

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Pension talks at Rolls Royce

BBC News

October 30, 2003

Union leaders are meeting managers from engineering giant Rolls-Royce to try and avert the threat of industrial action over pensions.

Like many company retirement plans, Rolls-Royce's pension fund had a £1bn deficit at the end of 2002 following heavy stock market falls over the last three years.

The firm is proposing to reduce the final pension entitlement for members of its lucrative final salary pension scheme.

But Amicus claims the company has rejected union proposals, including increased contributions, and is pressing ahead with plans, which could reduce the value of employee pensions "by 20%".

The union says it is now able to quickly hold a national strike ballot among manual and management workers at all Rolls Royce sites unless the dispute is resolved.

Workforce reduction
Amicus alleges the company, which has major plants at Derby, Sheffield, Sunderland, Bristol and Glasgow, is aiming to save £80m over 10 years.
Glen Johnson, East Midlands officer for Amicus, said: "Our younger members in the early stages of contributing to the pension scheme could lose out by as much as 20% of their benefits.

"We are in a unique situation where the workforce at all levels are now prepared to be balloted for strike action."

He said as well as stock market falls, Rolls Royce had also reduced the size of its workforce, which had also affected contributions to the pension scheme.

A demonstration was held outside Parliament earlier this week as part of the protest against the pension plans.

Final salary scheme
However, the firm said it also plans to increase the sum it pays into the pension fund by £30m a year.

Rolls-Royce also says that it had no choice other than to reform its pension scheme.

The firm stressed that it intended to keep its final salary scheme open to new and existing employees.
There are 18,000 employees in the Rolls Royce pension scheme, which serves 40,000 former employees.

A Rolls Royce spokesman said: "The intention of the current consultation is to agree a revised benefit structure that is competitive, affordable and secure."