Union to Ballot on Improved Rolls Royce Pension Offer

LONDON, November 5 -- Amicus trade union is to ballot its members on an improved pension restructuring package proposed by Rolls Royce.

The Company tabled a number of amended benefit proposals following negotiations with Confederation of Shipbuilding and Engineering Unions (CSEU) of which Amicus is the leading member.

The improved proposals include the protection of accrued past service at 1/60ths. While future service accrual will be based on 1/80ths, this will be calculated on pensionable salary without the Lower Earnings Level (LEL) reduction which currently applies, a change which greatly reduces the loss of future benefit for most employees.

Rolls Royce have also given an assurance that it remains their intention to provide increases on pensions in payment, though subject to affordability at future pension valuations.

The Company have also proposed a greater increase in their contributions of GBP35 m, making the Company's total contribution GBP95 m a year, and this higher level will be paid indefinitely or until benefits can start to be restored.

Amicus Rolls Royce convener and member of the negotiating team, Steve Wright, said:

"Rolls Royce have come back to the table with a much improved deal that achieves the trade unions aims of securing a final salary scheme, no reduction in the value of past service benefits, a commitment to long term funding and a fairer balance between increased company contributions and reductions in member benefits.

" We believe this is the best offer that can be achieved through negotiation and we will be proposing that our members accept it."

The unions have moved significantly, taking account of the Rolls Royce fund's deficit of GBP1.1bn, including the reduced accrual rate for future service, accepting changes to early retirement and closure of the in-house AVC scheme.

Amicus and other union members will be balloted on the 4th December. The ballot result is expected on 16th December. This replaces the planned industrial action ballot of members on Rolls Royce earlier pension proposals. Amicus represent 18,000 Rolls Royce workers.

Rolls Royce has a GBP19 bn order book and has recently used company reserves to boost shareholder dividends by GBP80 m.

Catherine Bithell on +44 0 7958 473 224 or Brian Gallagher on +44 0 7957 995 947.