Page last updated at 16:31 GMT, Friday, 17 July 2009 17:31 UK

Barclays workers in strike ballot

Barclays bank
Barclays froze its final-salary pension scheme to existing members in June

Workers at Barclays are to be balloted for strike action over the closure of its final-salary pension scheme to existing members, the Unite union said.

The ballot will be held in August, with potential industrial action taking place across the bank in September.

Unite said workers were "incensed" at the proposals. In a consultative vote, 92% of staff said they wanted to be balloted on industrial action.

Barclays accused the union of walking away from discussions.

"Barclays stands by the security of pension benefits already built up by employees and is committed to ensuring that pension provision is sustainable, equitable and affordable," the bank said in a statement.

By Martin Shankleman, Employment correspondent

The union feels it has to make a stand on the Barclays closure plan as it is one of the most extreme cuts in pension schemes yet announced.

Barclays wants to close its final scheme not only to new members but also to existing ones, which is a rare step.

And the union fears that unless it challenges the plan, other employers also operating expensive pension schemes, might be tempted to follow the Barclays approach.

A string of major companies have been closing their final-salary schemes because of the rising cost of funding them.

Over recent years, this has been for new members, but more recently the closures have also affected existing members.


Turmoil in the financial markets has pushed many pension schemes into deficit.

Barclays said last month that it plans to shut its scheme to existing members, affecting almost 18,000 staff.

"It is unacceptable that Barclays are proposing this unilateral change to workers' pensions. Unite members will not stand by as their employer rides roughshod over their retirement security," said Derek Simpson, joint general secretary of Unite.

Final-salary pension schemes promise to pay a retirement income based on a percentage of your salary every year for the rest of your life
The amount you get depends on how long you have spent working for your employer and how much you were earning at the time you gave up work - your final salary
The sum is typically between a half and a third of your salary
Revenue and Customs rules allow members to build up a pension equivalent to two-thirds their final salary

"The long-serving and dedicated workforce view this pension proposal as a betrayal by their employer.

"The forthcoming ballot within Barclays will send a strong message to private sector employers across the economy. Unite will not accept businesses using the economic downturn as a means to erode the important terms and conditions of our members."

Unite represents more than 25,000 Barclays workers.

Rising deficits

In June, Barclays chief executive John Varley told staff in a letter that the bank's pension fund deficit was worsening and the move was best for its staff and its pensioners.

Barclays' UK Retirement Fund, which includes its final-salary fund, had a deficit of £2.2bn at the end of September, compared with a £200m surplus just a year earlier.

The shortfall in the UK's 7,400 defined-benefit schemes, including final-salary pensions, stood at £200.1bn at the end of June, according to the Pension Protection Fund (PPF).

The number of schemes in deficit in June stood at 6,461, up from 6,389 schemes in May.

A year earlier, the schemes had a surplus of £13bn, according to the PPF, but funds have been hit partly because of falling investment returns and partly because people have been living longer.

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