A group of Carillion electricity workers may become a key test case for pension protections, according to union Prospect.
This group of employees, some of whom are now retired, were given significant pension protections when the electricity industry was privatised in the 1980s, and Prospect is calling on the government to ensure the commitments are honoured.
About 10,000 electricity workers were given guarantees about their pensions when the industry was privatised. They were part of the Electricity Supply Pension Scheme, and similar but separate arrangements were also made for the rail and transport industries.
The guarantees mean pensions would be at least as good as they would have been in the public sector. They prevent the employer or the scheme from making changes that would reduce future pension accruals or increase employee contributions.
The protections also require that members are no worse off if the scheme is wound up. Carillion’s collapse now raises questions regarding how these guarantees will be upheld for those who worked for the contractor.
Prospect general secretary Mike Clancy said: “The statutory pension protections granted at privatisation of the electricity industry were crucial to the success of that endeavour.”
He stressed that “the provision for people working in the industry before it was privatised to be no worse off as a result of a successor scheme, such as the Carillion [section] of the ESPS, being wound up must now come into effect”.
Clancy added: “Tens of thousands of protected persons in the electricity industry and other industries will be watching this situation closely to see that their colleagues in the Carillion [section] of the ESPS receive their benefits in full.”
