Trade unions accuse Unilever of 'opportunism' following pension proposals

Unilever has today (2 December) briefed staff on proposals to close the DB section of its hybrid pension scheme for new starters, and reduce the value of pension provisions for existing members, a move which trade unions have said “smacks of opportunism”.

While the formal consultation process is still to follow, the joint trade unions, comprising of Usdaw, Unite and GMB, have stipulated that “the pension scheme remains fully funded and has a strong covenant”.

The company has confirmed that it will be entering into consultation on several proposals with employee and trade union representatives, with no changes to be implemented prior to June 2020.

The joint trade unions stated that while they recognise there may be “an increasing pressure on the cost of providing and running the scheme”, they do not consider this a “justification” for the proposals outlined by the employer due to Unilever’s “size and success”.

Unilever have stated that the proposals, whilst intended to address the costs of the DB scheme, will also “better reflect employees’ modern day needs for more flexibility in their pensions and benefits”.

At the time of Unilever’s latest pension fund report and financial statement (31 March 2019), the employer reported contributions of £600m over the last three years which, combined with “good investment returns”, had meant “the funding position [for the scheme had] improved significantly”.

Unite national officer, Rhys McCarthy, said: “The joint trade unions have serious concerns, not only in relation to the existing provision, but also that if closure of the scheme for new starters goes ahead, this will be the death knell for the scheme in its entirety in the medium term.

“Unilever also needs to be a company with purpose for its hard working employees otherwise its recent claims of only having 'brands with purpose 'will come across as a cynical marketing ploy."

GMP national officer, Eamon O’Hearn added: “The company cannot claim to be a market leader with initiatives like 'Brands with Purpose' then decide to follow the market in a race to the bottom in pensions - either Unilever wants to set the standard or follow the crowd.

“This proposal will look to many staff as a lazy shortcut to help achieve the 20 per cent margin by 2020 target the company has set itself, regardless of the fact it would create a two-tier workforce resulting in unnecessary division and resentment across the entire UK business.”

    Share Story:

Recent Stories

De-risking options for pension schemes
In this latest Pensions Age podcast, Linklaters' Sarah Parkin talks to Laura Blows about the wide range of choice available to pensions schemes for the partial, or full, removal of their risks

Risk transfer opportunities
Laura Blows speaks to Lisa Purdy, Head of Fiduciary Distribution at Legal & General Investment Management and Gavin Smith, Pricing and Execution Director - UK PRT at Legal & General, about the impact of the recent market volatility on the bulk annuity and risk transfer market and the potential opportunities for the future

Bulk annuities during coronavirus
Laura Blows speaks to Just business development manager Prash Mehta about the impact of coronavirus on transactions

Investing in infrastructure
Laura Blows speaks to James Dawes about how, and why, pension funds should be looking at infrastructure as an investment opportunity