In 2018, Babcock Group announced a consultation on closing the Babcock International Group Pension Scheme to future accrual for all members from 31 March 2019.
Prospect’s initial response was to seek central talks on the consultation, but Babcock rejected this request.
Prospect then wrote to the Group outlining its disappointment that the consultation had not been informed by the 2019 actuarial valuation and at the lack of information in the consultation document to help members and unions understand and judge the proposals.
It also asked for the consultation to be extended so that it would be a meaningful exercise.
On 5 March 2019, the Group announced that its proposals would only affect future accrual for members without pension protections under the Energy Act or Fair Deal.
It also agreed to extend the consultation and delay implementation and provided information on the costs of the scheme that should have been disclosed at the outset.
Prospect deputy general secretary Garry Graham said: “The Pensions Regulator’s guidance on scheme consultations is that employers should provide as much information as necessary to enable those affected to understand the implications of the proposals and the context in which decisions have been made.”
But Graham welcomed Babcock’s decision to provide future accrual indefinitely to scheme members with Energy Act protections.
In its submission, Prospect also called for:
- implementation of the proposed changes to be delayed until October 2020 to allow the decision to be informed by the 2019 actuarial valuation
- the Group to change its stance on future accrual for members with Fair Deal pension protections
- the Group to continue to provide Fair Deal members with a broadly comparable pension scheme unless a retendering under New Fair Deal takes place
- an improvement in the employer contribution rate in the Babcock Retirement Savings Scheme to 20% of pensionable pay
- those faced with withdrawal of the scheme to be offered three alternatives: salary supplement, an employer contribution or a reduced salary supplement and an employer contribution
- members who remain in employment but suffer from full or partial incapacity to be able to claim their accrued scheme benefits early without a reduction on health grounds
- companies of the Group to review their policies on allowing members to work after retirement from the company pension scheme.
Prospect is waiting for Babcock’s response to the submission and will update members when it receives it.