The poodle must be very good at fortune telling - it looks like the first domino has just been knocked over:
Anger as Co-op closes the door to all on final salary pension schemes
4 Jan 2006
Leaders of the T&G warned that they expect calls for an industrial action ballot over
plans by the Co-op to close the final salary pension. The closure, which was
announced today and affects all the Co-op businesses, was met with "anger and
disappointment" by Ron Webb, T&G national secretary for transport, on behalf of
drivers across the organisation's operations.
"The T&G has around a thousand members in the transport and distribution
operations who will be directly affected by today's news," said Mr. Webb.
"This is not a good way to start 2006. The Co-op can be assured that we do not
accept the closure of the final salary scheme as a foregone conclusion. We see
today's announcement as first step in a consultation process."
The Co-op undertook a review of pension arrangements over a number of months last
year. The proposals from that review were put to all the unions at a meeting in
Manchester today. With effect from April 2006 the final salary schemes will close and
employees will start paying into a 'career average' scheme.
Mr. Webb said many of the T&G's members in the Co-op's transport and distribution
operations were long-standing employees who had built up many years service. Many of
the drivers were in their late forties and early fifties and had, he added, been
looking forward to continuing to build up a decent pension. "The final salary
pension has been a major reason for the drivers staying at the Co-op," he said.
"Whatever the assurances offered, what is being planned from April will seem like
cold comfort today."
The T&G's national committee will be receiving a report on the Co-op's plans in the
next few days. Mr. Webb said he expected a robust response and could not rule out
calls for an industrial action ballot being made. He said the union had suggested a
number of alternatives to complete closure during the review but the two sides could
not reach agreement. Promising a strong response to the proposals, Mr. Webb said
consultation should be meaningful. "Consultation means dialogue, considering
options and finding agreement," he stressed.
AND FURTHERMORE, THIS HELPS EXPLAIN THE PROBLEM:
Mercer says FTSE 350 deficits rise by €26bn
IPE.com 5/Jan/06: UK – The total pension scheme deficit for companies in the UK’s
FTSE 350 index has risen by £18bn (€26bn) to £93bn, according to estimates from
Mercer Human Resource Consulting.
It said deficits rose by 24% in 2005 despite strong equity market performance,
according to research by Mercer Human Resource Consulting. “Projections for 31
December 2005 year-end accounts suggest that deficits increased from £75bn in 2004
to £93bn last year.”
Although pension asset values rose by around £60bn to £422bn, scheme liabilities
grew by a similar amount, which increased the total deficit.
“Favourable investment performance did little to dilute the value of pension scheme
deficits in 2005,” said Mercer partner Tim Keogh.
“Bond markets rose at the same time as equity markets, causing yields to drop and
liabilities to grow. The need to allow for increased longevity has been an additional
headwind.
Mercer calculated the figures on the basis of international accounting standards -
which will be used for UK listed companies for the first time as at 31 December 2005.
The firm added that FTSE 350 companies account for around half of UK occupational
pension schemes in terms of fund assets.
In 2004, FTSE 350 companies made contributions of around £5bn to reduce their
pension scheme deficits. Mercer says anecdotal evidence suggests this figure won’t
be radically higher in 2005.
Said Keogh said: “Our experience suggests that many companies have waited to find
out the cost of their Pension Protection Fund levy and the strength of the new
funding regulations before they revise their contribution plans.
“Despite some companies making substantial contributions in 2005, often to
facilitate a major deal, we have yet to see the radical change in contribution
strategy the Pensions Regulator is probably hoping for.”
So, not much good news there - for "DRIVERS" read "PILOTS", I suspect there is yet more bad news to come our way - and who is going to sympathise? I wonder what the financial KPI bonus is for saving the Company the overheads associated with a Final Salary Scheme?
Oh, and for an Effoh, or junior Captain, just do the sums on a 'career average' scheme and see the difference!!! Bastards!!!