Union secures National Grid climbdown on pensions cap


Associate Business Editor

Trade union leaders are on the verge of  victory after a vicious 18-month pension battle with National Grid, the FTSE 100 giant that owns the electricity transmission system in England and Wales.

The board wanted to impose a cap on pensionable pay in any given year for National Grid’s lucrative final salary schemes, in order to close a deficit that stood at more than £1.1bn as of the last annual results in March.

This cap would have meant any pay rises of up to 2 per cent would have been subject to a contribution, with anything above that not pensionable.

But unions including Unison and Prospect managed to get the cap increased to 3 per cent and secured for eight years, as well as guarantees for accrued benefits.

This is expected to be voted through by 5,500 workers when the deal is put to them in ballot papers to be sent out on Monday. The deficit has been growing because only those 5,500 pay into a scheme that supports 75,000 retirees.

Unison’s national officer for utilities, Matthew Lay, said the rise in the cap was a “cracking deal” that could also save National Grid up to £200m.

There are also improvements to the less generous defined-contribution scheme, meaning that more than 10,000 workers have benefited from the drawn-out negotiations.

National Grid has also backed down from an initially hardline stance on reforming its pensions that was described by the unions in The Independent last year as “North Korean-style sabre-rattling”. The group was said to be looking at forcing workers to treble their monthly contributions – an idea that would possibly have  resulted in strikes had it been enforced. 

A National Grid spokeswoman said: “Both National Grid and the trade unions recognise the cost challenges to fund the future benefits of both our gas and electricity pension schemes. The focus during negotiations was to make sure both our defined-benefit schemes remain affordable, sustainable and attractive, and the deal that has been reached with the trade unions does just that.”

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with excess, cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings