Engineering news
UK employees of Honeywell are being balloted for industrial action over the closure of its final salary pension scheme and what Unite the union has dammed ‘woefully inadequate’ alternative pension arrangements offered in its place.
Unite, the country’s largest union, has started balloting its 1,100 members across the UK. Honeywell, a specialist in aerospace, transport systems and performance materials and technologies, has more than 50 sites across the UK.
The union said it is concerned about the alternatives on offer – the defined contribution (DC) scheme which relies on the vagaries of the stock market, and automatic enrolment, set up by the Pensions Act 2008, to ensure that every worker is in a pension scheme.
Unite said that that the DC scheme Honeywell proposed to offer to current final salary members had a contribution rate of 4% for employees to get a maximum 6% from the company.
Prior to 2013, this was the DC offer to new employees, but it was closed off then to coincide with auto-enrolment and new Honeywell employees are only now offered the legal minimum employer contribution of 1%.
Unite national officer Linda McCulloch said: “The consultative ballot will close on 31 October and that could lead to a full-scale strike ballot protesting at the unnecessary plan to close the final salary scheme and also the woefully inadequate alternative pension provisions.”
She added: “Honeywell likes to pride itself as a corporate global leader of excellence, but its DC and ‘automatic enrolment’ schemes are way below the industry average in terms of company contributions – it is pathetic for such a profitable multinational.
“Unite is not going to stand by and see the retirement incomes of our members, built up over many years, eroded to the tune of thousands of pounds a year.
“The final salary proposals affect 1,300 employees. Unfortunately, the management has, so far, firmly resisted national consultation on the pensions’ issue.”
In response, Honeywell said: "Honeywell is proposing to close its legacy Defined Benefit (DB) pension scheme to future accruals, and invite its remaining DB members to join its newer Defined Contribution (DC) scheme, which is already benefitting three-fourths of our UK employee base. This change only affects future accruals for those employees still on our older DB scheme – it does not impact pension benefits already earned.
"This change is in-line with UK market trends, with approximately half of FTSE 100 companies either having no DB scheme or freezing their DB schemes to future accruals. The DC scheme provides employees with greater flexibility over their pension investments and reduces risk and unpredictability for our business," it added.