Birmingham Airport to keep final salary pension scheme
Birmingham Airport’s final salary pension scheme is set to be retained in a major boost for nearly 400 workers – despite a deficit of £26million.
A “dogged” campaign by Unite the union has led to a likely partial compromise which would see a modified pension scheme still based on airport employees’ final salaries, it has been revealed.
The final detail of the long-running negotiations is still to be thrashed out, but Unite regional official John Partridge said union leaders were optimistic of an agreement.
The airport launched a 90-day consultation programme earlier this year in a bid to save costs after the scheme ran up a deficit of around £26 million.
If the current scheme, which enjoys company contributions of more than 20 per cent, is scrapped, the move could cost workers many thousands of pounds, devastating their retirement plans.
Mr Partridge said: “The company has come up with a proposal which would retain the final salary scheme. It is not as good, but it means the nearer they are to retirement, the nearer they will get to what they expected.
“This has provided some hope that we may be able to retain the final salary pension scheme and we may recommend members to go for that option.
“Talks are going on but it seems that, for the first time, they may be prepared not to end the final salary scheme.
“We are fairly encouraged by that; it will not involve increasing any members’ contributions. We are not there yet, but we believe we are on the right track.”
A compromise would mean a rare U-turn by a UK company over the demise of final salary schemes. Scores of high-profile companies, including the NEC Group, Barclays, Tarmac and Morrisons, have already scrapped their defined benefit schemes.
Meanwhile, workers were enraged to learn that airport chief executive Paul Kehoe was paid £386,000 last year.
Talks over the airport pension scheme will resume on October 19.
The airport has not commented while negotiations continue.