merger hits pensions scheme
WORKERS, NOVEMBER 2003 ISSUE
A merger of two major polymer (rubber) processing companies in Britain has triggered a pensions crisis for the workers involved. In yet another move in the relentless rationalisation of this industry, Trelleborg (14 sites in Britain) and the Polymer Sealing Solutions (PSS) division of Smiths Industries (10 sites in Britain) became one entity on 1 October. Trelleborg is a company listed on the Swedish stock exchange and the purchase of the PSS will take its global workforce to 21,000, operating in 40 countries.
Trelleborg does not operate an occupational pension scheme but has purchased a company which does, and what is more has a pension fund with a healthy surplus. On 6 October Trelleborg announced a proposal to offer a new 'money purchase' scheme to PSS employees, in line with the general trend of companies to take the first opportunity to ditch final salary schemes.
A six-month consultation period is planned, and PSS employees intend to ensure representation on the board of the new pensions company.
Meanwhile, the remaining workers in Smiths Group were recently told they would have to double their contributions and see a halving of any payouts - this after the company had been on a long-term pensions holiday.
In a complex pension set-up due to the countless mergers and acquisitions, the workers in the original Smiths Group pension scheme are faced with an impossible situation - a fund in deficit and the loss to Trelleborg of a separate section of the pension scheme (the PSS section) which had propped up the whole combined fund.
Smiths Group workers representatives have threatened to walk out if the company fails to come up with a better set of proposals.