16th February 2017 Anne-Marie Winton comments in Pensions Expert on Diageo deal with DB pension scheme members
Drinks company Diageo has avoided a strike by members of its defined benefit pension schemes after union members accepted a deal, bringing to an end months of back-and-forth.
During the campaign to protect the existing DB arrangement, unions mentioned the profits the drinks company was making and how these compared with the pension scheme. This echoes wider criticism of the schism between spending on deficits and dividends, which came to the fore last year.
However, Partner Anne-Marie Winton commented that often decisions about closing a pension scheme were based on factors other than cost:
“You don’t actually always close pension schemes for cost savings, but for volatility savings,” she said.
Anne-Marie added that employers looking at closing DB schemes to new members should consider the risk of creating resentment among the workforce:
“Why are you doing something for new employees and doing something different for existing employees?”
Read the full article in Pensions Expert here.
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