Page last updated at 13:59 GMT, Thursday, 19 April 2007 14:59 UK

Pension shut at police radio firm

O2 store
Airwave was part of O2 which was bought by Telefonica last year

The new owner of UK emergency services radio firm Airwave O2 has said it is to close the company's final salary pension scheme, hitting 800 workers.

Guardian Digital Communications unveiled the move just an hour after paying Spanish firm Telefonica 2.98bn euros ($4.05bn; 2.02bn) for Airwave.

Unions said they had been "misled" over the sale of Airwave to the firm, which is owned by Australian bank Macquarie.

Macquarie said it anticipated the new pension package would be "attractive".

It said staff would stay in the O2 fund for six months until a new Airwave plan could be created "with company contributions at no less than those currently provided."

'Completely unacceptable'

But the union said the matter had been handled in an "outrageous and disrespectful" manner and that as soon as the sale had gone through, the announcement on the pension scheme was made.

"There can be no doubt that the unions were misled over this issue and that a deliberate attempt was made to delay serious discussion until the sale was complete," said deputy general secretary Jeannie Drake.

"This is completely unacceptable. The union acted in good faith throughout the negotiations and the decision may well lead to a dispute with Airwave."

She added: "During the discussions, the union had clearly registered its concerns that members would not know what pension arrangements would be in place in the new company."

Remote coverage

Police are one of the main users of Airwave - with the service provided to all police forces throughout England, Scotland and Wales as part of a 2.9bn UK government contract.

Airwave also provides digital radio communications for all ambulance trusts in England and Wales and to fire services.

The secure network sold by Airwave is designed to offer coverage in remote areas and confined spaces.

Macquarie said that it expected to see revenue from the business grow by up to 30% in the next two years.

A growing number of companies are closing their final salary pension schemes because of the expense of running them. Firms are switching instead to cheaper money purchase pension schemes.

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Telefonica bids 18bn for UK's O2
31 Oct 05 |  Business

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