Pension benefit cuts without members' agreement have no legitimacy

7 October 2010

UCU today said changes to pension schemes needed proper consultation with fund members if they were to have any legitimacy.

On the day John Hutton's public-sector pension report is due, the union released a dossier on Anthony Hodges Consulting (AHC), 'pension communicators' who have been hired to deliver a consultation period for the Universities Superannuation Scheme (USS).
 
The union believes that all members of USS should get a say on the future of the scheme and should be balloted over changes it believes will reduce benefits for members, create a two-tier system and put the final salary scheme at risk.
 
The union's dossier includes quotes and glowing tributes from companies who have worked with AHC to make changes to their own pension schemes and lists those that have either cancelled their final salary scheme or are looking to cut benefits. The full dossier can be downloaded here: AHC dossier [46kb]
 
One example is this from Geoff McKenzie, Head of Pensions for Vodafone Group Services Limited, who praises AHC for their role in helping to close down Vodafone's final salary pension scheme:
 
'We recently completed a major pension change project including closing our DB Scheme to future accrual, improving our DC Plan and introducing salary sacrifice. AHC provided innovative ideas and excellent communications materials in delivering these challenging changes to the satisfaction of both the company and Trustees.' (AHC website).
 
The union also raised questions about AHC's approach to the consultation. UCU says it believes that simply asking all USS members for their opinion through a ballot is the simplest and fairest way to consult. It said the following text from the AHC website about asking the 'right questions' could be interpreted as seeking creative ways to get the answers they wanted:
 
'We find creative ways of getting the message across. It might be a game, a website or a video. Or even a combination. The answers aren't always obvious. By asking the right questions, we'll help you find them.' (AHC website)
 
UCU general secretary, Sally Hunt, said: 'I have a great deal of respect for the people who work within USS and it is perfectly entitled to employ who it likes to help it with its communications but the real issue is the inadequacy of the process AHC are helping to manage. What staff want is a vote on the changes proposed to their fund not someone trying to ask them the 'right' question and not gimmicks.'
 
'USS members may understandably be concerned by the companies AHC have helped in the past, as many of them have got rid of their final salary schemes. They may also be concerned that they have received such glowing references for their work in closing schemes to the satisfaction of the company and trustees. They may well share my concerns that this consultation process is going to lack any legitimacy – whatever questions are asked.'
Last updated: 11 December 2015

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