The IT firm, Fujitsu Services, has announced it is closing its final salary pension scheme to existing members. It was closed to new joiners in 2000.
The union, Unite!, centred around the firm’s Manchester site, has condemned the plans. Peter Skyte of Unite! said:
Fujitsu Services is a highly profitable company and made profits of £177m in the last financial year. The company has yet to produce any proper justification for this latest attempt to raise profits by cutting pension benefits, and this action may hinder future bids for blue chip private sector outsourcing contracts.
Despite such profits, Fujitsu has been attacking its workforce for some time. Contract-ors were given a 15% pay cut and employees had bonuses stopped and a pay freeze. You’d expect not to need a bonus but Fujitsu operate on an individual bargaining basis and for many workers the bonus is a substitute for a pay rise. It also suits Fujitsu, as no benefits get paid on a bonus.
About a quarter of the company’s workforce, 4000 people, are in the final salary scheme. Others have a defined contribution scheme. This is what the people being thrown off the final salary scheme will be offered. Defined contribution schemes are totally reliant on the stock market and could potentially pay out less than workers put in. Unite! has promised a “robust campaign” and the Manchester branch have already resolved to organise a ballot on industrial action.
The union is also right to focus on the outsourcing element of this. Fujitsu gets a lot of its business by winning new contracts from the government. Unless the law changes sometime soon, workers transferred from the public sector have protected pensions. Fujitsu isn’t currently closing its scheme for such workers, the Comparable Scheme, but it is surely only a matter of time. They regularly insist that anyone applying for an internal vacancy who’s transferred over swap to their internal terms and conditions, which now include losing a final salary pension. Workers at Fujitsu in Manchester equated this to a 20% pay cut.
The stand taken at Fujitsu is just the beginning of a long battle, as big companies like BP and Barclays have also announced closure of their final salary pensions.