Anger over plans by the Co-op to end the final salary pension scheme for employees across its businesses, has led to a formal call by transport workers for a strike ballot.
Transport and General Workers Union shop stewards, representing around one thousand drivers and warehouse workers, met yesterday in the wake of last week’s news and agreed to seek formal authority for the vote.
“This strong response to the Co-op should come as no surprise,” said T&G national secretary for transport Ron Webb. “We warned the Co-op that their plans to axe the final salary pension scheme would be unpopular and this is the proof.” In his report to the shop stewards Webb said he understood the Co-op scheme was not in deficit and that the majority of the funds’ investments were in the traditionally more secure bonds market. On that basis the reasons given for the drastic move seemed to have shaky foundations, he added.
“Our transport members have made it clear they will do all they can to keep the pensions they expected to take them into retirement,” added Webb. “The Co-op’s warm words were cold comfort. They cannot expect us to take this without a fight.”
In response, Nick Eyre, Co-operative Group secretary said: “This is a disappointing response from the T&G at a time when all UK pension funds are facing massive increases in both pension costs and associated risks which we have sought to address in a measured and appropriate way.” He also goes on to say that: “Whilst overall the three pension funds are not in deficit they are not immune to these cost pressures. It is only by continued careful and prudent management going forward that we can maintain a quality defined benefit scheme.”
“Since we announced details of the scheme independent pensions analysts and commentators have quickly recognised both the security and value it offers to our employees over inferior defined contribution schemes.
“For example, under the proposed new Group scheme benefits already accrued will continue to be linked to final pensionable salary with the new career average scheme applying to pension earned after 5 April. The new scheme will continue to include overtime as pensionable income, and the Group’s contribution to the fund of 16%, or £80m pa, is more than two and half times that of employees.”