Rethink pensions shake-up or face disruption


Rethink pensions shake-up or face disruption

Customers will not save a penny from radical proposals to shake up the way energy companies pass through pension costs, energy union Prospect has warned.

“On the contrary, the measures the regulator Ofgem wishes to impose on electricity companies could add layers of bureaucracy that will actually drive bills up,” said Deputy General Secretary Mike Clancy.

“Not only that, this pressure to force companies to reduce their pension costs wherever possible, probably by reducing employer contribution levels, will drive workers into direct collision with their employers in the electricity networks,” he added.

“Today we are making a last-ditch appeal to the regulator to keep the existing system in place and at the very least to allow more time for consultation and discussion on any changes they are proposing.

“The regulator is minded to introduce changes into the current distribution price control review, which determines how much electricity companies can charge their customers for the five years from March 2010. That would be a fatal error.

“Rushing through far-reaching changes that do not allow for each individual company scheme to be considered on its merits will create chaos.

“The effect will be to demoralise existing staff and discourage newcomers from applying to join the industry during a time of skills shortages, where a massive infrastructure expansion is on the cards.”

Prospect’s submission to Ofgem’s third and final consultation on pension principles for price control reviews is available to download from the Prospect library.