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2013 Energy Service Group Conference
25 February 2013

Conference notes that the Government is proposing to allow companies to override the pension protections which were implemented when the Electricity Industry was privatised. These guarantees were one of the few protections won by trade unions during the Thatcher government’s relentless drive to privatise public services. The 1990 Electricity Regulations prevent private employers from reducing the benefits or increasing the pension contributions for “Protected Persons”.

In most cases this has meant that all members of the Final Salary Schemes, Protected and non-Protected have enjoyed the same protections as employers have been reluctant to introduce two tier pension schemes. This proposal would also affect employees in the Rail and Coal industries where similar protections were conceded at privatisation.

With the introduction of the new single tier state pension in 2017 the government will be removing the Contracting Out provisions. Contracting Out allows employees and employers to pay reduced National Insurance contributions and opt out of the State second pension, known as SERPS or S2P. Once Contracting Out is ended employees and employers will have to pay full NI costs – an extra 1.4% for employees and 3.4% for employers on all earnings between £5k and £40k.

Whilst employees will be expected to shoulder the full burden of their increased NI payments, the employers have protested to the government about their increased costs and demanded the right to push these costs onto employees via reduced pension benefits or increased pension contributions. The “Protected Persons Regulations” are an obstacle to this and the government is therefore proposing to allow employers to override them and claw back increased employer NI costs from Pension Schemes in the Electricity, Rail and Coal industries.

Not only will this mean employees could be hit by increased NI contributions and reduced pension benefits, it also sets a dangerous precedent in allowing the Protected Person Regulations to be overridden.

Conference calls on the Service Group Executive to:

1)Demand that UNISON lobby the government to have these proposals dropped and make contact with other unions affected by this measure to campaign against these proposals.

2)Write to Energy Branches seeking their support for this campaign.

3)Campaign for employers to pay their share of the increased NI contributions and oppose any attempts to reduce pension benefits or increase contributions for any employee.