Saturday 16 December 2017

Union rejects Ulster Bank's proposed cuts to benefit schemes

Charlie Weston Personal Finance Editor

THE main union at Ulster Bank has rejected plans to close the defined benefit pension scheme to new members, and to cap pension rises for existing members.

Finance union, the IBOA, said it was consulting its members on a response to moves by the bank to cap the pensionable pay of bankers at just 2pc a year.

Alternatively, the cap will match the rate of inflation, whichever is the lower.

IBOA general secretary Larry Broderick said the pensions move and the proposal to freeze the pay of staff were "totally unacceptable" to the union.

The bank, which has 7,000 staff on the island, also intends to close its defined benefit pension scheme to new members.

The plan to cap the pensionable pay for those in the defined benefit scheme will mean that even if staff receive a large pay rise the most they will be able to increase their salary, for pension calculation purposes, will be by 2pc a year.


This will severely impact on the final pension amount for those in the defined benefit scheme.

Mr Broderick said: "The bank's proposals have neither been discussed nor agreed with the union.

"We consider that our members in Ulster Bank are once again being scapegoated for the profligate lending policies of senior management in both Ulster Bank and its parent company, Royal Bank of Scotland.

"Our members in Ulster Bank are outraged to hear that senior management is proposing a major assault on the value of their pensions in the wake of the revelation that former chief executive, Fred Goodwin, was awarded an annual pension of £700,000 despite bringing RBS to the brink of collapse.

"The bank's proposal to make no pay award to ordinary bank officials for 2009 is similarly unacceptable -- not least because no later than Monday of this week, management advised us that they were committed to entering a conciliation process on pay at the start of September."

The IBOA said Ulster Bank has a contractual obligation to staff to pay increments and performance rewards under pay deals.

The bank's proposal is in breach of our members' contractual rights, Mr Broderick says.

He claimed Ulster Bank staff were being discriminated against in comparison to other staff in the RBS Group. In a statement, Ulster Bank said its defined benefit schemes will continue.

But it added that it was necessary, in light of the current economic situation to cap annual increase in pensionable pay by 2pc or the rate of inflation, whichever is lower.

It also said that from November 1, the defined benefit scheme will close to new employees and will be replaced by a defined contribution scheme.

"We will now enter a period of discussion with employee representatives," the statement said.

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