England

Protest over pension changes proposed at Severn Trent

Workers have taken part in a joint union protest over proposed changes to Severn Trent's pension arrangements.

Unison said a move to a defined contribution scheme "transfers all of the investment risk" in funding future pensions from the company to employees.

The water firm said it did not believe the current situation was sustainable for its "long-term financial health".

The protest took place outside the firm's annual meeting at Birmingham's ICC.

Unison has been balloting 1,000 members over whether "they are willing to accept the company's decision to end its defined benefit pension scheme, or take industrial action to defend it".

'Depends on performance'

Under proposals all existing pensions would be replaced by one new defined contribution scheme, with changes introduced no earlier than April 2012, Severn Trent said.

A total of 50% of employees were currently members of the firm's defined benefits scheme, 23% were members of a defined contribution scheme, with 27% without any pension provision, it added.

Unison said the defined benefit pension scheme was normally based on the final salary and the employer would guarantee a certain amount would be received at the end of the worker's service.

A move to a defined contribution scheme meant this guarantee "is removed and the pension received depends on the performance of the portfolio the money is invested in", it added.

'Cancelled further meetings'

Unison said employees had based their retirement plans on the final salary pension scheme and the firm "should return to the negotiating table in good faith".

Andrew Johnson, Unison West Midlands regional organiser for Severn Trent, said: "We will continue to oppose these plans and have cancelled any further meetings until the results of our membership ballot."

Severn Trent said it was one month into a three-month consultation with its 6,000 plus employees and was not proposing changes "lightly".

Chief executive Tony Wray said: "Our aim is to encourage every one of our employees to save for their retirement, backed by company contributions, whilst safeguarding the benefits our pension scheme members have already built up."

The company said it was proposing to automatically enrol new employees into the new pension from 2012 and automatically enrol those workers who were not currently members of a Severn Trent scheme from 2013.

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