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.”