Construction equipment manufacturer JCB will close one of its pension schemes next month in a move which will affect around 1,100 UK employees.
The digger maker – which has factories in Staffordshire, Derbyshire and Wrexham – is shutting down the J C Bamford Lifeplan scheme in April following an extensive consultation.
Its closure will mean all of its UK employees will now be part of the same pension scheme – the J C Bamford Stakeholder Scheme – which is based on contributions from employees and the company, unlike the Lifeplan scheme which pays retirees a sum of money depending on their salary and length of service.
At the moment, around 18 per cent of JCB’s UK workforce – or 1,100 employees – are part of The Lifeplan scheme – which closed to new members in 2004.
They will now be given the chance to join the 4,600 other members on the Stakeholder scheme.
Union representatives from the GMB have hit out at JCB’s decision to close Lifeplan.
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Regional organiser Stuart Harrison said: “This is a tragic decision that will affect 1,100 workers. These are dedicated workers who’ve toiled for many years to make the business what it is today.
“We will be balloting our members on future courses of action.”
Pensions expert Richard Jacobs, who runs Richard Jacobs Pension & Trustee Services in Newcastle-under-Lyme, says it is “not good news” for JCB employees.
He said: “There is not one company in the FTSE 100 which has a final salary scheme open to new members because the way it works means the employer won’t know what that final benefit is going to be, so it is totally unsustainable.
“It is not good news that JCB employees will no longer have this fantastic pension scheme, but it is important that they know that what they have earned so far cannot be taken away from them, it is theirs and it will be protected.
“But there is no doubt that the Stakeholder Scheme will not be as good.”
JCB completed its consultation process with staff and representatives – including the GMB – in February.
Martin Graves, JCB group director of human resources, said: “These changes allow JCB to control the uncertainty of pension costs now and in the future.”