Steelworkers ballot on pension changes

Caparo is one of the largest steel businesses in the UK

Steelworkers in Wrexham are voting on whether to join their colleagues in south Wales in becoming the first in the UK to take industrial action to defend their pensions.

Around 65 members of the Iron and Steel Trades Confederation (ISTC) at Caparo Wires are being balloted on an overtime ban.

Members are being told that if they do not sign up for this inferior pension scheme they will be left without any life cover

ISTC General Secretary Michael Leahy

Workers at the company's Scunthorpe plant began an overtime ban on Friday, and staff at Tredegar voted overwhelmingly to start a ban next Tuesday.

It follows a decision by the steel manufacturer to replace its pension scheme with one based on stock market performance, rather than a percentage of the workers total final salary.

The Caparo Group, owned by Labour peer Lord Paul, is one of the UK's largest steel businesses with branches in Scunthorpe, Tredegar, Walsall and Wrexham.

Employees are angry their final salary scheme is being replaced with a stakeholder plan for both new and existing members.

The ISTC have threatened strike action

Stakeholder pensions were launched in April last year as a low cost way for those earning modest incomes to save for retirement, and ease the burden on state coffers.

Like other pension plans, money paid into a stakeholder pension will be invested in items such as stocks and shares, bonds and cash savings accounts.

However, ISTC members in Scunthorpe and Tredegar opposed to the plans have already voted to take strike action if Caparo refuse to comply with union wishes.

The union wants Caparo to suspend the scheme and meet the union to discuss other options.

'Outrage'

Michael Leahy, ISTC General Secretary, said Caparo workers are "outraged" that their security in retirement is being threatened.

"ISTC members at Caparo face the prospect of a much reduced income after years of service than that which they expected," he said.

"Members are being told that if they do not sign up for this inferior pension scheme they will be left without any life cover - this is unacceptable.

"We want the company to halt these plans and sit down and talk to us in good faith. There is no need to end this well funded scheme."

An increasing number of companies have closed their final salary pension schemes over the last few years, blaming poorly-performing stock markets, punitive taxation and a new accounting standard.

'Urgent action'

A recent poll revealed plans by a quarter of small firms to wind-up or close schemes within the next year.

In their place, companies are offering riskier schemes, known as "money purchase" plans, which pass on the investment risk to the worker.

Michael Leahy said: "We need to end this race to the bottom on pensions if future generations of British workers, especially those in industrial communities, are to have a reasonable income in retirement."

"The government needs to take action urgently to ensure that the stakeholder pension scheme is not used to undermine well funded final salary schemes such as Caparo's," he said.

The result of the ballot of workers at the Wrexham plant are not expected to be known for at least a week.