Pensions betrayal

Workers at AWE Plc – the Atomic Weapons Establishment – will stage a 24-hour strike on Monday (November 14) in the dispute over the threat to close the defined benefit pension scheme and substitute it with an inferior alternative.

Six hundred employees, members of Unite,  voted overwhelmingly for strike action at the AWE’s two sites at Aldermaston and Burghfield in Berkshire.

There will also be a continuous overtime ban; a work to rule; and withdrawal of goodwill from Tuesday November 15 due to the company’s decision to close the scheme on December 31 this year.

Unite’s members are particularly irked at broken promises on pensions made by the Ministry of Defence (MoD) in the 1990s when the workforce was transferred to the private sector.

The union said that if those promises had been honoured it would not have precipitated plans to close the scheme at the end of the year.

“Unite has a massive mandate to take strike action over plans to close the defined benefit pension scheme,” said Unite regional officer Bob Middleton. “Workers voted by 92 per cent for strike action and by 97 per cent for industrial action short of a strike.

“There is an extra edge to this strike action caused by the gratuitous betrayal of promises over pensions made by the MoD in the 1990s.

“We are calling on the AWE management, even at this eleventh hour, to hold urgent talks on the pensions’ issue; otherwise we will have no option than to stage further strike action in the run-up to Christmas,” he added.

“It is a disgrace that the UK government, which is constantly harking on about the importance of the Trident programme, is not prepared to resolve this matter.

“The reason given for the proposed closure is that there is a pension deficit, but Unite has argued that, following members increasing their contributions, there has not been an opportunity to establish whether this increase will start to reduce the deficit,” Middleton noted. “It is our view that it will.”

In recent weeks, carmaker BMW; US multinational Honeywell; Gatwick Airport Ltd; and the Post Office have all announced that they planning to close their defined benefit pensions – and Unite has pledged to fight the move to the defined contribution option by all these organisations. Last week, the union said drinks behemoth Diageo wanted to change its final salary pension scheme into a career average one.

Unite said that there was an accelerating trend of companies closing their defined benefit pension schemes, based on an individual’s career earnings, and replacing them with defined contribution ones that rely on the roller-coaster vagaries of the stock market.

The union said that company bosses saw defined benefit pensions as ‘a soft target’ to save money for the benefit of shareholders – the most extreme example being the BHS pensions’ scandal.

Currently, AWE scheme members pay 10 per cent of their salary into the scheme and the employer pays 26 per cent. The new pension proposal would involve AWE contributing nine per cent and employees contributing whatever they wished.

AWE Plc, which employs about 4,000 people, is a consortium of two American-owned companies Lockheed Martin and Jacobs Engineering, and UK-listed Serco.