GMB Members At EDF Energy Overwhelming Vote To Accept Changes To Defined Benefit Pension Scheme Covering 15,000 Staff
Keeping an open DB scheme for new members is a brilliant achievement for members in the face of closures in other private sector companies says GMB
GMB, the union for energy workers, announced that members employed by EDF Energy have returned a 94% yes vote on a 75% turnout in favour of pension reform covering over 15,000 staff across EDF. See notes to editors for copy of GMB press release dated 6th November plus the details of the proposals.
GMB has members in all areas of EDF including nuclear power stations, coal power stations, meter readers and contact centres.
Eamon O Hearn Large, National Officer, said “The agreement will ensure that there are no further changes to EDF pensions for at least the next five years.
It also provides a DB Career Average Revalued Earnings (CARE) scheme for new entrants, bucking the trend of closing schemes in the UK private sector.
Almost all GMB members will see no change to their current pension arrangements and some will benefit from the new DB CARE scheme.
GMB members have been clear about their negotiating principles of protecting the lowest paid, securing a long term deal and keeping open a DB scheme for new entrants.
Keeping an open DB scheme for new members is a brilliant achievement for GMB members in the face of closures in other private sector companies.
GMB members have led this process and deserve full credit for delivering a massive Yes vote on a huge turnout well in excess of any new government thresholds."
Contact: Eamon O Hearn Large 07918 777 09 or 0207 391 6700 or GMB press Office 07921 289 880
Notes to editors
1 GMB release dated 6th November 2015
GMB BALLOTING MEMBERS OVER PROPOSED PENSION CHANGES FOR 15,000 STAFF AT EDF ENERGY
A majority of members will experience either no change to their pension arrangements or be better off particularly our women members in the call centres says GMB
A workplace ballot is currently underway for GMB members in EDF energy on a proposed agreement on pensions covering over 15,000 staff across EDF. The new proposed new agreement covers the workforce from Nuclear Engineers, meter readers to call centre staff. See notes to editors for copy of Joint Statement following Trades Union Pension Forum on 15 October 2015 on Pension Benefit Reform:
GMB senior representatives are recommending a Yes vote on the agreement. The ballot closes on 4th December. See notes to editors for copy of GMB circular to members on the ballot.
Eamon O Hearn Large, National Officer, said “Last year the Company threatened GMB with de-recognition when we publicised they were planning to close one of three of their final salary pension schemes (they have 3), cap pensionable increases at 1% and introduce a defined contributions scheme for all new entrants.
GMB campaigned and led negotiations to secure the retention of all three schemes, a 1% cap on salaries above £64,456 and the introduction of a new defined benefit Career Average Revalued Earnings (CARE) scheme for new entrants.
CARE is a defined benefit pension scheme that guarantees a certain pension on retirement.
The CARE scheme is potentially more beneficial for the majority of GMB members. A majority of GMB members will experience either no change to their pension arrangements or be better off particularly our women members in the call centres.
It is thanks to the steadfastness of GMB members and their determination to hold onto secure pensions that EDF will now be one of few companies in the UK with an open defined benefit pension scheme to new entrants. Too many other companies took the easy route and threw responsibility back to the state and taxpayers to provide income in retirement for their staff.”
2 Pension Benefit Reform: Joint Statement following Trades Union Pension Forum on 15 October 2015
The Trades Union Pension Forum (TUPF) met on 15 October 2015 and formerly endorsed the final negotiated proposed Pensions Agreement. The Trades Unions are now in a position to recommend the proposal and the Company will now begin statutory consultation.
Amendments to the Pensions Agreement
The final version of the Agreement had been reached through intense joint working and incorporated a number of changes arising from feedback received from Company and Trades Unions early consultation briefings with employees and members. These changes benefit employees as well as adding further clarity to key aspects of the Agreement. Changes since version 7 of the Agreement shared in August include the following:
· Guarantee that for employees with a pensionable basic salary within 1% of the threshold, the headroom for annual pensionable salary growth will be no less than 1% in the calendar year
· Clarification that the CARE arrangements will not limit the number of years' pensionable service that a member may accrue and equally that there is no such limit for EEPS final salary scheme benefits
· For those employees eligible for the Defined Contribution (DC) acceleration scheme, this will cease after the later of: a 5 year period from the date on which the employee first exceeds the threshold under the Agreement; or the date on which the employee's DC arrangement has received employer contributions totaling £3,000. In summary, every employee who exceeds the threshold will be eligible to build up £3000 in employer contributions as part of the DC acceleration scheme.
· Pensionable salary capping will not apply in respect of added years purchased either in full or in part prior to 1 January 2016
New clauses have been added on:
- the application of the agreement to part-time employees;
- a Defined Benefit (DB) underpin for employees whose pensionable salary cap has been limited by the threshold or the cap so that DB pension benefits cannot be less favourable compared to the scenario under which the individual would have become a deferred pensioner on 31 December 2015; and
- the Equality Act 2010
A copy of the final draft Pensions Agreement for statutory consultation, incorporating these changes will be found on Pulse.
In addition to the above changes, an introduction has been added to Appendix 1, which conditions both existing and future Collective Agreements so that they are aligned with the Pensions Agreement and Appendix 2 now provides model Non-Pensionability Agreement (NPA) letters.
The TUPF also received a summary of the Joint Queen’s Counsels’ (QC) legal opinion in response to the joint instructions issued from the Company, Trades Unions and Trustees of each of the Company’s DB schemes. The QCs specialized in pensions and employment law. The QCs’ joint opinion confirmed that the Agreement does not contravene the Protected Persons Regulations (1990) in respect of electricity pensions and is consistent with the relevant employees retaining their protected person status. Other legal questions related to the Pensions Act (1995), the duty of mutual trust and confidence implied in contracts of employment and the Equality Act (2010). It was clear that the Agreement, in the opinion of the QCs’ is robust in relation to all these legal issues and that it is important to ensure that the processes and documentation associated with the Agreement are properly applied.
Statutory consultation will commence on Friday 23 October when Proposal Guides and Personal Illustration Statements will be sent to all employee’s home addresses. Mandatory briefing sessions, which all employees are to attend, will commence on 30 October for a five week period. These mandatory briefing sessions will be delivered by local management and supported by local Trades Union representatives.
During the statutory consultation period there will also be an opportunity for every employee to attend Pension Surgeries, run by independent pensions experts, Towers Watson. The surgeries will take place across the Company and will help inform employees about how the Agreement potentially affects them and about their pensions options and choices for the future. Surgeries will be run in two phases. Phase one, which will take place over November and December, will focus on using the tools provided to understand the individual impact of the proposed changes. Phase two will take place in early 2016 and will focus on using those tools and all of the information provided to inform individual choices arising from implementation. In the latter phase, priority will be given to members of the EEPS scheme who may transfer to CARE. Additionally they will also cover DC top up choices for all members above the pensionable salary threshold.
Throughout the statutory consultation phase, employees will be able to access information relating to the pensions reforms via a dedicated website which will be available remotely from any internet connection as well as Pulse. A modeller will also be available to allow people to review different personal pension scenarios relating to their career and retirement plans. Full information on the website and modeller will be available in your proposal guide.
The Trades Unions said that, following the conclusion of negotiations with the Company, and engagement with their representatives and members, they will be recommending the Pensions Agreement in their member ballots. Each Trades Union will communicate with their members about the ballot arrangements, with the conclusion of all ballots expected to be by 4 December at the latest. It is important that all Trades Union members register their vote in the ballot.
The TUPF would like to thank all employees for engaging with the process and for the feedback received, which has helped to shape the Pensions Agreement and the approach to the statutory consultation phase. The TUPF would also like to reinforce the importance of all employees attending the mandatory briefing sessions to ensure they fully understand the personal impact of the proposed pension reforms.
Carol McArthur (Chair of the TUPF), and
Tim Davison (TU Chair of the Company Council)
on behalf of the Trades Union Pension Forum
3 GMB circular to members regarding the ballot:
Your GMB Senior Reps met recently to consider a recommendation on the draft Pensions Agreement.
Firstly it is worth remembering how we got here.
Last year GMB was threatened with de-recognition because we publicised information about Project Alpha, which was exploring a number of far-reaching pension reforms that coincidentally appeared in the Company's original proposals. The Company’s view that changes in economic and other circumstances required the following proposed pension reforms:
- Capping everyone’s pensionable salary increase at 1% - effectively a “starting salary” pension;
- Closing EEPS to new members and;
- Introducing a Defined Contribution (DC) scheme for new entrants.
GMB Negotiating Principles
At the outset GMB immediately sought members’ approval to enter negotiations with a clear set of principles, though we recognised that many members remained sceptical about the need for change:
- Protecting the lowest paid and lowest grades;
- Securing a long-term agreement;
- Maintaining a Defined Benefit (DB) provision for new entrants;
- Try to reverse the 2012 pension increases and;
- Committing to consult members on any final proposal.
To their credit the Company acknowledged it had to negotiate any proposals with the TU’s, and within these negotiations, your GMB National Negotiators fought for those principles. We thank members for their patience over the long talks, especially as information was limited.
Existing BEGGS/EEGS/EEPS Scheme Members
Introduces a pensionable salary threshold of £64,456 a year (spine point 35 on the NJC Collective Agreement Pay scales);
Anyone whose basic salary is UNDER THIS threshold will not be affected by the cap (see below);
This threshold will not impact on current progression steps;
Anyone who earns above the salary threshold will have their pensionable pay capped at 1% and have access to a DC top-up pot;
The salary threshold will increase with NJC pay awards;
All current pensionable allowances and payments will remain pensionable and are not included in the salary threshold;
The proposal is a 5-Year deal that can only be reopened in the event of improved economic and business performance – so the agreement can only be improved;
DB Career Average (CARE) and New Entrants
A 1/60th accrual DB Career Average (CARE) scheme will be offered to new entrants;
It will have the same contribution rate of 5% as EEPS (1/80th);
All current EEPS members will be automatically transferred into the CARE Scheme but will have the option of returning to EEPS;
During the Statutory Consultation process members will have access to advice on which option is best for them;
Any existing additional payments agreements will be honoured;
This is a key issue and the Company have initial legal advice that they can make the changes, however we are securing joint QC advice on the legitimacy of this. We know other Companies have introduced specific measures, but we need to be clear about EDF’s specific proposal.
GMB Commitment to Consultation
When we initially sought members’ approval to enter the talks, your GMB National Negotiators promised that we would revisit sites to formally consult on any final proposal and be accountable directly to members.
We made this commitment because we knew many members were sceptical about the need for change and wanted to see what any final proposal looked like, and these briefings will be members’ opportunity to ask more detailed questions.
GMB believes it has delivered as best as possible on the principles members endorsed, though we didn’t succeed in reversing the 2012 increases, and that overall we have limited the impact on the vast majority of our members.
Now is the time to ensure that any colleagues not in the Union join so that they can have their say on the pension proposals.
All GMB members will be given a vote on the proposal which will take place after the formal TU consultation process.
EAMON O’HEARN LARGE