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GMB union challenges Ofgem over proposed to pensionsTrade union GMB has met Ofgem to discuss concerns that the regulator's proposed changes to pensions will lead to cuts in benefits for members. The meeting follows the GMB's success at last month's TUC Congress in getting a motion passed calling on the government to block Ofgem's pension proposals. The regulator launched a review in August of the treatment of pension costs under network price controls. The TUC motion said: "Congress notes with dismay that Ofgem's proposals include removing statutory protections for pensions implemented when utilities were privatised in the 1980s... Congress believes Ofgem's proposals will have a far-reaching impact upon the pension rights of employees, without bringing any substantial benefit to hard-pressed consumers." Currently, the aggregate funding allowance for so-called defined benefit pension schemes amounts to more than £441 million a year and is based on principles agreed in 2003. The existing regulatory regime allows utility companies to recover their actual pension costs. At present, distribution companies forecast that contributions are running at a 25 per cent surplus. One of the issues Ofgem is considering is how to treat stranded surpluses. The regulator is looking at how or whether the benefits of any surplus could be released to consumers who funded it. Gary Smith, GMB national secretary, said: "In the current economic crisis it is madness to threaten pension funds. It is time for Ofgem to re-think these proposals. For them to attack the pensions of the workers in the industry is the last straw for the GMB." Source: Utility Week © Faversham House Group Ltd 2009. News articles may be copied or forwarded
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