Energy organisation Eon will potentially close its defined benefit (DB) pension schemes to future accrual, which could affect around 3,000 UK-based employees.
The organisation is considering the pension scheme closures as part of a review into its final salary and DB arrangements.
Eon closed various DB pension plans to new employees by 2008, although approximately 3,000 of the organisation’s 10,000 UK staff, who joined the pension schemes before 2008, still continue to accrue benefits.
An estimated 400 employees, who joined the DB pension scheme by 1990, are thought to have protected rights, dating from the time of Eon’s privatisation. This would therefore shield these employees from any changes moving forward.
The energy organisation’s DB schemes currently have a collective deficit of at least £500 million, and its annual report states that the schemes had a net liability of £552 million as of the end of 2016.
As well as possibly closing the DB pension schemes to future accrual, the organisation is also understood to be considering reductions to holiday allowances and other benefits. It is also reviewing its outsourcing arrangements. These potential changes are to align with Eon’s understood goals of streamlining its operations and reducing costs.
A spokesperson at Eon said: “As is right, we regularly review all aspects of our business to make sure we are working in the best possible way to deliver for our customers. That is why we are currently looking at a number of aspects connected to our set-up and are consulting closely with trade unions and [employees] in a number of different areas to make sure they are involved with any decisions taken. Our [employees] will be the first to hear any appropriate updates.”
