Accrual shock stuns members

Pension scheme accrual shock stuns QinetiQ members

In a new setback for staff, QinetiQ has announced that it intends to close its defined benefit pension scheme to future accrual. The defence research company launched a 60-day consultation in October.

Prospect national secretary, David Luxton said the news was a major blow to 2,200 scheme members. “If this proposal goes ahead it will have a significant impact on the financial plans of many individuals and families.” But because the union is in the midst of a re-recognition battle with the company, it is not party to the consultation even though Prospect played a major role in changes agreed in 2008 to sustain the scheme, including a risk-sharing agreement.

QinetiQ says the scheme must close because “the debt of future pay-outs continues to swell.” But Prospect says there are shortterm factors that have affected the asset value of the scheme, particularly the impact of quantitative easing on the rate of gilt yields.

Luxton said the purpose of the 2008 reforms was to help manage the risks associated with running the scheme.

“We are very disappointed that because of de-recognition no attempt was made by the company to engage in constructive discussion over how costs could be managed so the scheme does not have to close.” To help members participate in the consultation, Prospect is organising membership meetings to provide background information on the scheme. But the company will not allow meetings to be held on site.

“Prospect is keen to engage with the company to agree a solution that does not require complete closure. At the same time we are keen to explore the scope for improvements to the group personal pension,” said Luxton.