“Ofgem seems to be suggesting that electricity companies are running their pension schemes without sufficient care, and passing on the costs of that to consumers,” said Mike Clancy, Prospect Deputy General Secretary.
“That’s not true. In fact the companies apply rigorous standards to pension scheme management, consistent with actuarial best practice and pension law. Like the rest of industry, pension costs in the energy sector have come under severe attack from almost every employer in recent years. They need no further encouragement from Ofgem.
“Ofgem’s desire to intervene is in total contrast to its hands-off approach to industry safety standards. 2007 was the worst year for fatal and major injury accidents in the electricity supply industry since 1992-93.
“When we met the regulator in June to raise our concerns about the impact of the price regime on safety standards, we were told that was a matter for the companies.
“We will not tolerate this attack on pensions and employment conditions, not least because there are more serious challenges for Ofgem to deal with.”
Prospect is also urging Ofgem to tackle the serious shortage of skilled engineering and technical personnel at a time of increased investment in the sector and argues that reducing pensions benefits will only exacerbate this shortage.
The full response can be found under Prospect submissions in the Document library.