AA Pension Talks

Threatened May Bank Holiday 'strike' is off

Strike action planned for the May Day Bank Holiday has been called off

Following the latest ballots of AA staff which rejected strike action over the proposed changes to the AA pension scheme, talks have resumed between the AA management and the Independent Democratic Union (IDU).

The AA had stated that if the IDU did not accept the AA proposals to keep the Defined Benefit sections open, then the Union should come up with an alternative 'cost neutral' proposal. The discussions have focussed on alternative proposals to keep open the AA's final salary and career average section pensions which have just been tabled.

The IDU has agreed to withdraw the planned strike action for the May Bank Holiday whilst they re-ballot their members on the new proposals, which they are recommending.

Unlike most other private companies the AA wants to keep its Defined Benefits (DB) scheme open but changes are needed to maintain long-term viability.

The need for change to DB schemes is acknowledged in an information note recently issued by Department for Work and Pensions (DWP)* on risk sharing options for employers considering changes to DB pension schemes.

The memo refers to 'Employers who have already gone down the risk or cost-sharing route tend to be paternalistic in their philosophy; when considering scheme changes they have not been happy to transfer all investment or longevity risk to their employees but have preferred to find a solution that leads to a more predictable final pension for scheme members whilst keeping firmer control over future costs'.

Andrew Strong, AA Services CEO, said: "We are pleased that constructive talks on essential changes to the AA pension are taking place. The AA believes that it is in the interests of all staff to keep open our defined benefit pension sections when others, such as the RAC, are proposing to close theirs. However, as the Government and TUC have recognised, this cannot be done at any cost and therefore changes are required."

Alistair Maclean, National Secretary of the IDU, said: "Pensions are an important part of our members' remuneration package so it is essential that we get changes agreed. We accept that to maintain good pensions for our members a degree of risk sharing will be required. We are confident that agreement can be reached soon on this issue."

* http://www.dwp.gov.uk/docs/risk-sharing-db-pension-schemes.pdf

 

23 April 2010