UK - Unite, the trade union, has confirmed a pensions dispute with Ineos over planned changes to the defined benefit (DB) pension scheme is at an end, after revised proposals were accepted by members.

The dispute over Ineos’ plans - to close the scheme to new entrants and reduce pension provision for existing members - resulted in a two-day strike in April 2008 which shut down the Grangemouth oil refinery and threatened fuel supplies to Scotland and the north of England. (See earlier IPE article: Pension strike threatens UK fuel supply)

Attempts to avoid the strike failed when negotiations between the parties broke down and it was claimed Unite had rejected suggestions to take the proposed changes “off the table” and enter into a three-month consultation. (See earlier IPE article: Grangemouth talks stall but gov’t ‘expert’ on standby)

After nine months of discussions between the union and the company, Unite confirmed on 26 January 2009 its members had voted to accept the proposals, after it was agreed:

The scheme will remain open to new members; Pension benefits will be maintained, and Workers will start to contribute 2% towards the scheme, whereas no payments were previously required.

The technical details of the proposals, including changes to accrual rates for building up entitlements, have not been revealed, but Phil McNulty, national officer for Unite, said: “The dispute is now over. This is a result of the company and the union sitting down and coming to an agreement.”

Having completed talks on this scheme, Unite is now raising concerns about potential pension changes at another company, Selex Galileo, as it claimed the firm has written to the 4,200 active members of the 100+ DB scheme to inform them of “sweeping changes” including closure to new entrants, increased contributions and reduced benefits.

The union said it is “extremely concerned” at the proposals outlined by Selex Galileo, which was formerly owned by BAE Systems but is now a part of the Italian defence firm Finmeccanica.

Unite has claimed figures from Selex’s UK company accounts showed profit, before tax and interest, was £76.4m (€83.2m) in 2007, an increase of 35% on the previous year, and argued “early indications suggest that the 2008 results are set to follow this trend”.

Bernie Hamilton, national officer at Unite, said: “This is unacceptable and the company ought to reconsider its position. Selex is a good business with a dedicated workforce. The business makes good profits and when it acquired this business in April 2005 the pension scheme was fully funded with no deficit.”

Unite claimed it had successfully deferred any decision on the closure of the 100+ scheme, but stated it does not accept that employees should “shoulder the burden of extra contributions, increased risk and reduced benefits when Selex-Galileo and Finmeccanica can clearly afford to pay the pension promise”.

“We understand the trading difficulties of today, but fail to see how even in the downturn this company is saying they can’t afford to continue without wholesale changes. If these proposals are not withdrawn we will seek urgent talks with the company in order to protect our members interests,” added Hamilton.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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