Changes to pension scheme and other T&C(6 Posts)
I've worked for the same (very very large) employer for 23 years.
It's been recently announced that one single contract is being brought in for all staff, we are going onto one set of T&C. It's in consultation period at the moment but appears to be a done deal.
As a long serving member of staff, the differences to my existing contract are pretty dramatic, the most major being:
1) closure of my final salary pension scheme. A new DCS will be opened instead. The effect this has on my anticipated pension is huge, my new forecast pension if I work another 20 years is about 2/3 of the last quote I received.
2) I am currently entitled to 1 year sick pay, going down to 6mths
3) losing 2 days holiday
I will be compensated financially for the holiday loss but not the first 2 changes.
Since it is such a huge organisation I am sure the legality of doing this must have been checked out thoroughly but I find it amazing that my employer can reduce their contribution to my pension (they currently contribute 25-30%, will go down to 8-16%) so much without even compensating me.
I do appreciate that my existing terms are exceptional, however they are my T&C and I would appreciate any comments how to respond, if it is reasonable to expect any improvement to the proposals or compensation for the reduction in benefits.
Essentially I guess I would like to know can they do this!
Thanks for reading!
I'd expect your employer to offer a lump sum additional contribution to your pension
No idea about the sick pay
Chew, unless you have a provision in your contract of employment which entitles you to membership of a DB pension scheme your employer can close the DB scheme and offer you a DC scheme instead. Even if you have a provision in your contract which says you are entitled to a DB scheme there are ways that your employer can get round this. Seems harsh I know but DB schemes are closing all the time.
We had exactly the same thing last year with the closing off our final salary scheme. It was contractual but the employer just got round this by ending our current contracts and issuing new ones. If you didn't sign the new one, you no longer had a job. This is legal apparently.
I think the best thing you can do is ensure you have an employee forum (if no union) where you can try to argue improved transitional terms, for example a one off lump sum, extra pay for a period of time, increased employer contributions to the new scheme, improved life cover or anything else you can think off.
Unfortunately, this is happening in a lot of companies at the moment because they can no longer afford to support the final salary pension schemes. We did manage to negotiate slightly better terms in my company (through a combination of unions and employee representatives as some areas of the business had unions and others didn't). I think you need to get together with other affected employees and try to do some collective negotiation with your employee for improved transitition terms.
There are literally thousands in the same position so I am hoping someone starts something. I am not represented by a Union, only staff are recognised, not managers. There is an Employee Council for managers instead but I have never seen anything from them. I had forgotten about the existence of the EC though, I'll look them up tomorrow and see what they're proposing, if anything.
RedBird can I ask what sort of compensation you achieved, if any?
Interestingly the company is not claiming it can't afford the scheme anymore, it's doing fine financially. It's doing it on the grounds of equality, so new and old employees are on the same contract. On this basis they are unlikely to increase employer contributions to the new scheme for old employees because all the old 'ring fencing' is exactly what they're taking away.
Hi chewbacca we got our life cover doubled (from x4 salary to x8), additional pensions contributions to the new scheme for the first couple of years and a small salary rebate for a year (5%).
Your company should at least be consulting with you if it is planning to change your contractual t's and c's so without an union, they should recognise some kind of employee forum if they want to demonstrate they have jumped through all the proper hoops in the consultation period.
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