Unions get guarantee on BAE final salary schemes

Following the threat of industrial action, unions at BAE Systems the military and aerospace group have made some progress in trying to resolve a pensions crisis at the company.

BAE had told unions that a £2.3 billion deficit in its schemes had to be plugged. Unions were worried that this could mean closing the schemes and higher employee contributions.

Unions were particularly angry at the company for demanding higher employee contributions after it had enjoyed a 12-year £120 million pensions contribution holiday in the Royal Ordnance pension scheme, one of the four main final salary schemes in the group.

Following negotiations earlier this month, 52 senior convenors from around the company met to discuss the latest company plans.

The unions managed to win two major concessions. The company backed down on its threat to close its schemes and will bear the brunt of plugging the deficit.

T&G general union national officer Jack Dromey, one of the main negotiators, said: "Next stage negotiations will be necessary, however, to keep to an absolute minimum any increased contributions that our members might have to make towards their pension schemes."

Dromey added: "The message from the members is unmistakeable - if the company demands too much, they will take industrial action."