CWU members at O2 have backed negotiated changes to the final salary pension scheme that preserves the option of keeping full final salary benefits.
O2 welcomed the move, adding that it would keep the scheme 'competitive.'
The ballot closed yesterday (Thursday) with 94% of those who voted backing the CWU proposals. Almost 60% of members took part in the ballot, a high turnout for consultative ballots.
Andy Kerr, CWU deputy general secretary said: ‘This is a fantastic result which strongly endorses the work of CWU’s negotiating team. As part of the deal, members can receive independent financial advice and then get on with choosing which pension option suits them best, with the option of retaining their full final salary pension.’
Sally Bridge, CWU assistant secretary, said: ‘The high turnout in this ballot shows that people are – contrary to popular belief – interested in pensions. Our members not only care about their pension scheme, but were prepared to get involved and take part in this ballot.
‘This strong endorsement demonstrates that our members in O2 value the significance of what we’ve tried to do for them on this difficult but vitally important employment benefit.’
Over 2,000 employees, including managers and non-managers, are affected by these changes. Members of the O2 Section One pension scheme, which is a defined contribution scheme that was established in 2001, are unaffected.
A spokesman for O2 said: ‘We are pleased that the CWU have backed our pension proposals which we believe will keep the scheme very competitive.’
A 60-day consultation exercise will now begin in the company and members of Section Two (April 1986 to April 2001) and Section Three ( pre-April 1986) of the O2 pension scheme have a number of options to choose from.
For members of Section Two the first option is that contributions increase from 6% to 10% with no other changes. The second option is that contributions increase from 6% to 7.5%. Benefits for future service are reduced as the accrual rate changes from 60ths to 80ths.
The change in accrual rates will also flow through to other benefits such as dependents pensions and redundancy.
The third option is for members to leave Section 2. If employees take this option the company will pay 21% of salary for 5 years and 10% of salary thereafter. This payment can be paid in part, or in full, into Section 1 of the Plan – which is the defined contribution section or taken as cash.
For Section 3 members the first option is for contributions increase from 6% to 10% with no other changes.
The second option is for contributions to increase from 6% to 7.5%. Benefits for future service are reduced. The current arrangement of 1/80th and 3/80th automatic cash per year of service is reduced to 1/80th with no automatic cash.
The third option is to leave Section 3. If members take this option the company will pay them 21% of salary for five years and 10% of salary thereafter. This payment can be either paid in part, or in full, into Section 1 of the Plan – which is the defined contribution section – or taken as cash.