Call to delay QinetiQ pension scheme closure

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Prospect calls for delay to QinetiQ pension scheme closure

Prospect has asked defence contractor QinetiQ to delay the closure of its pension scheme to allow discussion on new government proposals which would strengthen the case for keeping the scheme open.



QinetiQ's consultation on the proposed closure of its defined benefit pension scheme finished at the end of November 2012. The scheme closed to future accrual from 31 January 31 2013.

National secretary, David Luxton said: "It is now evident that the closure date was postponed because the Ministry of Defence had not signed off the decision.

"In the meantime, in January the Department for Work and Pensions announced steps to change the basis on which actuarial valuations of pension schemes are calculated. This could substantially reduce the future risks to QinetiQ – the main reason stated for closing the scheme."

Prospect says the key change in government policy, on which the DWP is now consulting, is to allow an averaging-out of the discount rate, usually based on gilt yields, that is used to calculate pension liabilities for the three-yearly actuarial valuations.

In the context of the QinetiQ scheme, the last valuation, on June 30, 2011, showed that the pension deficit had actually reduced from the previous valuation in June 2008.

The company says that the deficit may be much higher by the next valuation in June 2014, posing a risk to future funding.

ut Prospect says the DWP proposals could significantly reduce that risk, allowing the QinetiQ scheme to continue.

"Unfortunately because of derecognition, QinetiQ will not engage with Prospect on pensions and all collective consultation will take place with the company's employee engagement group.

"Nevertheless we feel that members should be aware that the company's case for closing the scheme has been overtaken by these developments, and should be re-assessed in the light of proposals to change the basis on which pension scheme deficits are calculated," said Luxton.

Prospect has held off-site meetings focusing on making the most of the defined-contribution QinetiQ group pension plan.