Unilever has announced they propose to close their final salary pension scheme to future benefit accrual from 1 January 2012. The scheme, which has 5,000 members, was closed to new entrants in 2008 but the company claims the scheme has become ‘increasingly unaffordable and unsustainable’. Unilever says it has paid in £580 million over the past three years to address the scheme’s deficit, However, Unilever has a dreadful record of attacking workers and destroying jobs in order to boost executive pay packets and shareholder profits. When CEO Niall Fitzgerald left Unilever in 2004 he got £3 million added to his pension, and with continuing salary and share options, he received in all a £17 million golden handshake.
Since the start of the company’s so-called Path to Growth Strategy in 2000 when there were 300,000 workers employed by Unilever worldwide, half of those jobs have been lost. Since then, according to Unileverwatch, what has grown is management pay packets and share options, profits and “shareholder value”. Casualisation and outsourcing has grown, with extreme cases like the Lipton/Brooke Bond tea factory in Khanewal, Pakistan where 97% of the workforce was casual until a recent union victory.
The company unveiled the proposal to end final salary pensions alongside a range of other changes to company pension arrangements and have said they intend to offer existing final salary scheme members a new two-part pension scheme instead. The proposed new scheme will consist of a defined benefit career average plan plus a defined contribution investing plan. All existing benefits in the final salary scheme will be protected.
David Johnson, Usdaw National Officer, said:
Usdaw is extremely disappointed by Unilever’s announcement and we are already preparing to challenge their proposals in detail once the formal 90 day consultation period begins on 1 June.
The proposals could have a very serious impact on our members and their plans for retirement and we will be doing everything we can to represent and protect their interests throughout the consultation period and beyond.”
