The Assessment and Qualifications Alliance (AQA) has closed its final salary pension scheme.
The AQA undertook a consultation process with employees and their union representatives, which lasted 74 days.
Management at the AQA rejected money-saving proposals put forward by staff unions that would have enabled the final salary pension scheme to continue. AQA’s senior staff will continue to have access to a defined benefit (DB) scheme.
The closing of the scheme will affect 433 of the 1,050 staff currently employed by the examination body. The scheme has been closed to new members since 2006.
Rachael Maskell, national officer for Unite’s not-for-profit sector, said: “The rationale given to staff is that the fund has a projected deficit of £17.5 million. It is also the only one of the three major English awarding bodies to announce plans to scrap its final salary scheme.
“Counter proposals from staff have included a reduction in the accrual rate, a career average scheme and joining the Greater Manchester pension fund, of which some employees are members. These have all been dismissed by management.”
In a statement, the AQA said: “Last year, it became clear we would need to further change the scheme because it was substantially in deficit and we have a duty to secure a sustainable future for AQA and its employees. We regret having to change our pension scheme, but the deficit has grown considerably over the past few years and despite implementing various actions to reduce it, the deficit had continued to grow.
“We undertook a lengthy and thorough consultation process with employees and their representatives and made significant changes to our initial proposals in order to address their concerns. Although our standard consultation period is 60 days, we recognized how important this issue was for employees and extended it by two weeks.
“We changed our initial proposal so it was a much better deal for members. The key aspects of this were that we created a new scheme for these members which enabled them to invest a proportion of their contributions into a fixed return investment fund, alongside a defined contribution (DC) scheme. Also, we had originally offered staff a transitional payment of 14% of pensionable salary into their new DC fund.
“In response to a union submission during the consultation, we provided the options of having a higher payment of 16% paid directly into the fixed return component of the scheme, or having the 14% payment taken as cash through payroll. The final scheme was confirmed in November.
“Due to the real problems we have experienced recruiting senior staff in recent years, a final salary pension scheme for directors was introduced into AQA’s terms and conditions in 2009. This is not the AQA DB pension scheme that was closed, but instead is provided via the Universities Superannuation Scheme. This issue was carefully considered during consultation, but the decision was made to retain this benefit to attract and retain individuals at this level.
“We believe we continue to offer an attractive benefits package to all staff which is kept under regular review. Our DC scheme is recognised with the Pensions Quality Mark, which is held by only 89 UK pension schemes.”
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