UNISON is balloting 1,000 Severn Trent Water members over whether they are willing to accept the company’s decision to end its defined benefit pension scheme, or take industrial action to defend it.
Members of the UK’s largest union, and supporters will also protest outside Severn Trent Water’s annual general meeting on 20 July.
The decision to end the defined benefits scheme and move to a defined contribution scheme transfer sall of the investment risk in funding future pensions from the company to its employees*. UNISON is opposing the change to the pension scheme, highlighting the fact that employees have based their retirement plans on the final salary pension scheme.
The union has cancelled a planned consultation meeting on 19 July while it ballots members.
UNISON’s Head of Business and Environment, Mike Jeram, said:
“We entered into this consultation in good faith, but the company has now rejected any form of defined benefits scheme.
“Severn Trent is passing the buck by transferring the risk to staff. Our members have based their retirement plans on the pension scheme and deserve to be treated fairly.
“We will continue to oppose these plans and have cancelled any further meetings until the results of our membership ballot.”
*The defined benefit pension scheme sets out rules on the employee and employer contribution and is normally based on the final salary. The employer will guarantee that a certain amount of money will be received by the employee at the end of their service.
A move to a defined contribution scheme means that this guarantee is removed and the pension received depends on the performance of the portfolio the money is invested in. If the portfolio performance goes down, for example the collapse of a private equity firm, then the employee will lose out.