AA, the roadside recovery provider, has announced a consultation on proposed changes to its defined benefit (DB) pension scheme, which the GMB union has described as a “nightmare” for members.

The proposals include plans to close the DB scheme to future accrual and to transfer those employees still in the scheme into a defined contribution (DC) arrangement, with all accrued benefits in the DB scheme remaining protected.

Around 2,800 employees out of the 7,500 are currently in the DB arrangement.

Commenting on the plans, an AA spokesperson said: “This is in-line with what most responsible companies have already done. In fact, 95 per cent of FSTE 250 companies no longer have fully open DB schemes.

“We have briefed our 7,500 employees this week and are also briefing our recognised trade union, the IDU, and our Management Forum, who represent management employees. We have already briefed our pension trustees.

"The formal 60-day consultation period with the IDU and the Management Forum starts today."

The plans will not affect any employee who joined after 1 October 2016, as they will already be in one of the companies' DC schemes.

The Independent Democratic Union (IDU), which has been AA's recognised union since 2005, were informed on Friday 17 January, and have since confirmed that a meeting with AA is scheduled for this Thursday (23 January).

IDU general secretary, Alistair Maclean, confirmed that the union was in discussion with AA over the changes, highlighting that they could effect the futures of around 3,000 people.

The GMB union however, whilst not the recognised trade union for AA, has come out firmly against the proposals, arguing that the changes would leave pension pots “exposed to stock market flutters” and leave members in a "retirement nightmare".

GMB regional secretary, Paul Maloney said: “The current pension scheme meant our members could look forward to retirement with a degree of certainty.

“Now they face a nightmare with their income varying wildly as a result of stock market fluctuations.

“For many workers this will leave their retirement dreams in tatters – all thanks to the miserly actions of money-grubbing AA bosses, desperately trying to service huge debts which should never have been allowed to accrue in the first place."

Maloney added: “GMB has requested urgent meetings with the company in order to get a better understanding of the proposed changes and will fight tooth and nail for our members’ futures.”

Unilever also recently announced proposals for the defined benefit section of its hybrid scheme, which also faced criticism, with the joint trade unions Usdaw, Unite and GMB arguing the move “smacks of opportunism”.

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