The company has also agreed to work with the two unions to consider moving to a career average revalued earnings scheme (CARE) for future service as an alternative to closing the scheme to further accrual. Both sides have agreed to try to work towards an agreement to be implemented by 31 March 2016 as AWE looks to reduce a pensions deficit of more than £600m.
In a further concession the company has accepted the case for modifying the proposed cap on future increases to pensionable pay put forward by Prospect. This looks to rectify anomalies in the application of the cap for employees who have only recently been required to work shifts and for apprentices. But the company is proceeding with a 1.1% increase in employee pension contributions from 1 May 2015.
David Luxton, Prospect national secretary, said: “The company’s decision to withdraw its proposal to close the pension scheme to new entrants is a significant achievement and evidence AWE has listened to the arguments put forward by the unions as well as many members.
“We now have time to put forward a constructive and persuasive case for retaining a defined benefits pension scheme for all employees rather than have a two-tier workforce which would be divisive and not helpful to AWE’s strategic long-term programme.”