In place of strife – some light in the tunnel?

GMB (trade union)

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Clearly things have not gone well in the summer long negotiations between public sector unions and those involved in the management of the large unfunded pensions (for firemen, teachers , police and civil servants).

The battle lines appear to have been drawn for strike action and we can look forward to a winter of discontent. If this sounds a little “old hat” – well that’s hardly surprising. We have expected this outcome from the point when a new Government arrived in May 2010. Something had to be done about the widening gap between public and private sector reward and it was never likely that we’d see private sector organisations levelling up their pension promises.

Threats of strikes are not confined to the public sector. Both BA and Unilever face militant members of their schemes angry with benefit cuts (in BA’s case) and DB scheme closure (in Unilever’s).

In such a confrontational situation, there are rays of hope. The agreement of the GMB to support Centrica‘s proposals for the British Gas Engineer’s scheme demonstrates that strike action is not the only way.

Indeed, the tone and substance  of comments made by Brian Strutton, GMB’s public sector pension negotiator over the weekend, is thoughtful and conciliatory.

The pensions debate in the newspapers and broadcast media is  far advanced from where we were two years ago.  Not only do we talk about pensions more but the quality of the debate has improved.

Could it be that we are moving slowly towards a new pensions contract? Here’s an extract from a report on a resolved dispute between a Canadian union and Air Canada who has been looking to close a defined benefit plan to future hires.

The union argued the defined benefit pension plan was efficient, effective and economically productive. To shift to a defined contribution system would have had a detrimental impact on future workers, the union said.

CAW president Ken Lewenza said the ruling is important for all of Air Canada’s employees.

“This is an extremely important ruling and demonstrates that no employer, regardless of how large or small, should believe they have the unmitigated right to destroy a worker’s retirement security,” Lewenza said in a statement released Sunday.

The result of the ruling is a hybrid pension for future hires, which consists of both defined benefit and defined contribution components. New hires will receive part of their benefit from the existing pension plan and part from a defined contribution plan, contributed to by both workers and the employer.

On Sunday, Air Canada is looking over a new contract proposal from the Canadian Union of Public Employees representing 6,800 flight attendants ahead of Wednesday’s strike deadline.

Full story  http://www.ctv.ca/CTVNews/TopStories/20110918/air-canada-union-pension-plan-110918

Let’s hope that a strike can be averted in Canada and that something can be learned in the UK to avert the seemingly inevitable.

Hybrid solutions (a form of compromise) have a place to play both technically and culturally.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to In place of strife – some light in the tunnel?

  1. Pingback: Play Pen on Public Sector Pensions « Henrytapper's Blog

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