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


Closing the gender pension gap
Laura Blows discusses the gender pension gap with Scottish Widows head of workplace strategic relationships, Jill Henderson, in our latest Pensions Age video interview

Endgames and LDI: Lessons to be learnt
At the PLSA Annual Conference, Laura Blows spoke to State Street Global Advisors EMEA head of LDI, Jeremy Rideau, about DB endgames and LDI in the wake of the gilts crisis of two years ago

Keeping on track
In the latest Pensions Age podcast, Sophie Smith talks to Pensions Dashboards Programme (PDP) principal, Chris Curry, about the latest pensions dashboards developments, and the work still needed to stay on track
Building investments in a DC world
In the latest Pensions Age podcast, Sophie Smith talks to USS Investment Management’s head of investment product management, Naomi Clark, about the USS’ DC investments and its journey into private markets

Advertisement