Amicus, the union for RBS staff, said yesterday it was deeply disappointed there would be no final-salary scheme for those joining the bank.. A clutch of the key players in the once-troubled split-capital investment trust industry, including most of Collins Stewart’s former investment trust team, have joined forces to launch a new institutional stockbroking business, Fairfax. Two months later, Harrods axed its final-salary scheme.The changes to retirement benefits have angered unions. In the months since, a number of companies have announced significant changes to employee pension entitlements.In December, the doorstep lender Provident Financial told workers they must more than double contributions to remain in its final-salary scheme. “A one-size-fits-all solution is no longer appropriate for the demands of a 21st-century workforce who require flexibility to meet their needs in different ways at different times in their lives. But it is important to stress that for existing staff if they do nothing, nothing changes.”An ageing population and spiralling pension costs have prompted a rash of Britain’s biggest companies to shut expensive final-salary schemes and move workers into generally cheaper programmes, whose performance depends on how well the markets in which they invest perform.In December, the services group Rentokil Initial became the first major UK company to say it was closing its final-salary scheme to existing members – in effect withdrawing a benefit which was promised to staff when they joined.
It made record pre-tax profits of almost £8bn last year, but liabilities within the pension scheme were £1.9bn more than its assets.Neil Roden, the bank’s head of personnel, said yesterday the new plan would offer staff greater choice and flexibility. When asked in 2002 whether RBS would abandon its final-salary scheme, Sir George declared: “The bank has a longstanding contract with the staff, which is an emotional contract and is very much to our benefit.”However, from October the bank will instead pay new employees an extra 15 per cent on their salaries to spend as they choose.Existing members of the final-salary scheme, which is funded entirely by RBS with no contribution from workers, will also be given the choice to opt out and take the extra pay.The bank has about 90,000 employees and 225,000 current and retired staff in its final-salary scheme. The change came just two months after Sir Fred Goodwin, the chief executive, vowed to honour the “emotional contract” made with staff over their pension benefits.
Sir George Mathewson, RBS’s recently departed chairman, had emphasised the importance of maintaining the benefit to staff. The two big UK naval programmes will keep its Portsmouth yard busy for the next 10 years and will mean a 50 per cent rise in the manual workforce.. Royal Bank of Scotland became the latest in a string of major UK companies to shut its final-salary pension scheme to new employees yesterday. The chances of the MoD ordering an extra two Type 45s on top of the six already being built were 50:50, he added.Shipbuilding accounts for just 16 per cent of VT, with the overwhelming majority of turnover, orders and profits coming from support services.
Many of these are defence-related but VT has also recently won school-building contracts and is experimenting with a move into waste disposal.Mr Lester said there were £10bn worth of opportunities for the group over the medium term in shipbuilding and support services. It is a very key business,” Mr Lester said.He said industry and the MoD were working towards a “target cost” of £3.5bn for the two carriers, a programme expected to get the final go-ahead early next year. Another possibility VT is looking at is the creation of a joint ship-repair and maintenance company along with Babcock and Devonport Management.The Ministry of Defence is understood to be keen to see VT management run any unified naval company, given VT’s success in overseas markets and its prominent position on the two big UK programmes to build Type 45 destroyers and two new aircraft carriers “Our shipbuilding business punches above its weight. Paul Lester, VT’s chief executive, denied the collapse of the Babcock bid had put the company on the back foot and said it would remain in a strong position to help create a single UK naval shipbuilder.
Speaking as VT reported a 33 per cent rise in pre-tax profits to £55.5m for last year, Mr Lester said he would wait a month or two for “the dust to settle” before renewing talks with rival warship builders.One option would be a joint venture company bringing together VT’s Portsmouth yard, BAE’s Clydeside yards and Babcock’s Rosyth facility in Scotland. VT Group is pressing ahead with plans to merge its warship building activities with those of BAE Systems after the failure of the two companies to pull off a takeover of the rival naval business Babcock.
Unions argued that Ellesmere Port was the most productive of all GM’s European plants.. “Our priority now is to make sure that there are no compulsory redundancies made at the plant and we are committed to ensuring that the Astra replacement comes to Ellesmere Port to ensure a long-term future for the people that are staying.” Amicus and the Transport and General Workers Union blamed “weak” UK employment laws for the job losses. The shift reduction will help increase the efficiency of the Ellesmere Port plant. “It is something that works to meet current capacity projections, and not something we expect to see repeated at Ellesmere Port in the current Astra’s lifecycle, nor is it an indicator of future product allocation decisions.” Mr Simpson said it was a big blow, especially after recent job cuts at other car firms including MG Rover, Jaguar and Peugeot. “Together with our labour representative, we have searched for alternatives, but there is no viable alternative. “Based on current operating costs and current product life cycle projections, the reduction of a shift at the Ellesmere Port plant will be the most cost-efficient approach to attaining necessary reductions in output.
