Divide and rule at P&O pensions
Pensions buy-outs – the latest fashion for solving the pensions problem – are so new the rules are still being set. But the £800m P&O deal not only sets new standards by being the Britain’s largest scheme, it has split past employees from current staff.
The shipping company will continue to run the pension fund of the 6,000 people it still employs, but the 11,000 former workers in its pension fund have been transferred to the buy-out scheme run by Paternoster, the largest of the new companies offering to takeover unwanted funds.
It is a potentially dangerous precedent. Companies may baulk at upsetting their workers by changing their pension arrangements, but they have little interest in the people who have left but who remain in the pension fund. Current workers have clout; past employees do not.
It seems the P&O scheme trustees objected to a total sell-out of the fund but were happy to divide it, suggesting they see their obligations to deferred pensioners different to their obligations to contributing members.
It means former staff will have their pensions set by Paternoster, which has no interest in improving their payments above today’s contractual minimum, while Dubai-owned P&O is free to enhance the terms of current workers – say through better widows’ rights or higher increases. Such enhancements might be part of P&O’s pay negotiations.
Splitting past and present workers is an implicit admission that being part of a buy-out fund is inferior to membership of a company-sponsored fund. P&O’s past employees should be worried they have been sold down the river while the current workers sail on at full steam ahead.
May 6th, 2008 at 11:32 am
Recently - following my fathers passing, I discovered his “Continuous Certificate of Discharge” which
contains evidence to the effect that there is pension money being held in his name by The Prudential
Insurance in the form of a Policy.
My father was employed by P&O in the 1930’s - he served as a ships writer aboard -”Barrabool” - “Rawalpindi” and “Comorin”.
In spite of approaches to The Prudential Insurance” - they insist that the only way the money can be traced is to advise them of the type of policy.
Unfortunately owing to the passage of time this is very difficult as we live in Melbourne Australia.
If you could throw any light on the matter, I would be most grateful.
Yours sincerely - Keith A. Gard