AA Offers Good Pension Deal

AA responds to announced strike date

AA responds to announced strike date


Edmund King, AA President, says: "We are disappointed that the union has publicly announced strike dates (Sunday 2 and Monday 3 May), even though they have yet to tell us.

"The ballot result only came in yesterday and, contrary to the union's claims, we responded today asking them to come up with an alternative proposal that achieves the same goals.

"Despite being timed by the union to cause maximum disruption, we are happy to reassure members that we have robust contingency plans in place to maintain a good service to members on strike days and will continue to work towards averting the industrial action. The majority of our patrols didn't vote for strike action and we expect a good number will work as normal, supplemented by our other contingency plans.

"We are confident that our patrols will always put members first – that's why they joined the AA and why we want to give them a good pension."

8 April 2010



7 April 2010

The AA today expressed disappointment that a ballot of AA patrols in the IDU union resulted in a small majority of those voting opting for strike action.

The AA points out that a majority of patrols overall did not vote in favour of strike action as more than 400 are not in the Union. The AA has also stressed that in the event of any strike action contingency plans would be in place to ensure a good breakdown service for members.

  • 1155 voted yes to strike (57%)
  • 864 voted no to strike (43%)
  • 87% turnout
  • Only 48% of those balloted supported strike action

The AA accused its recognised union, the IDU, of "jumping the gun", by balloting AA patrols on strike action over proposed changes to the AA pension scheme before the consultation period ends on 23 April.

Unlike most other private companies the AA wants to keep its Defined Benefits scheme open. The AA is still consulting on details.

The Office for National Statistics showed that 100,000 private sector final salary schemes were closed in 2008. 87% of final salary schemes were in deficit last year. The AA wants to buck the trend and keep the AA scheme open.

Changes being proposed include raising the final salary cap from 1% to 2.5%.

There is no cap proposed on the career average section and those who wish to move across to the career average scheme can do so.

Although the proposals call for a control over the future cost of the scheme, they also call on the company to increase its contributions by about 40% (from £13m to about £18m) and to clear the current deficit (estimated at £190m in November 2009).

Comment

Andrew Strong, AA Services CEO, said: "We have committed to increase our contributions by 40%, and have improved our offer by raising the cap so feel that the Union are out of touch with the real world on this issue. This is not a strong mandate to strike and we would urge the union to think again. When you look at problems that beset Readers Digest and many blue chip companies over their pension deficits we believe that the fact that we want to keep our defined benefit scheme open is good news. In the consultations most staff seem to accept the need for the company to make changes to the scheme and we think the majority of staff will support our proposals.

contingency plans would be enacted to ensure that members receive a good service "We want to offer all our staff a good deal on pensions – our staff are our greatest asset and pensions are an important part of their remuneration package. The AA is bucking the trend by proposing to keep our final salary section and career average sections open when most companies are closing theirs. We are proposing reasonable changes to safe-guard the future of the pension scheme.

"Ballots calling for industrial action are premature as we believe that most staff accept the need for change."

Many companies have closed defined benefit schemes and moved to defined contribution schemes (Boots, Tate & Lyle, IBM, Vodafone, Barclays etc). Changes to pension schemes are affecting all sorts of companies and organisations from the Church of England (reported deficit of £290m) to Unison (reported deficit of £275m).

Strong concluded: "The AA would like to reassure members that in the event of any strike action, contingency plans would be enacted to ensure that members receive a good service.

"During the recent snow and ice when most of the country ground to a halt, the AA attended over 1/2 million members – nearly double its usual breakdowns. For us, we will try to ensure it is business as usual."

Factfile

For clarity – the AA Pension scheme consists of two sections – a final salary section which closed to new members in 2005 and a Career Average (CARE) section which is open to new members of the pension scheme.

 

8 April 2010