Truck workers fight for pension: Change of ownership led to a retirement dilemma

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The Independent Online
HUNDREDS of redundant truck workers are battling to win back the right to retire early on full pensions after their jobs were transferred to another company.

Former staff of General Motors' Bedford trucks business say that after being made redundant by their new employer, AWD, in June 1992 their pensions will be up to 35 per cent less than they would have been before the business transfer if they retire at 55. In some cases, the pension they will now receive is more than pounds 200 a month less.

Ironically, the loss has come about because many workers preferred to leave their pension benefits with the Vauxhall company fund, rather than opt for a new and untried option.

Sean Hand, a partner at Dibb Lupton Broomhead, a London solicitors acting for the redundant workers, said: 'The workers who were joining AWD were promised both by Vauxhall and their new employer that their pension rights would be unaffected.'

The allegations are denied by General Motors, which insists that redundant AWD workers are entitled to exactly the same benefits as Vauxhall staff who lose their jobs.

In 1987 General Motors decided to sell off its loss-making Bedford commercial vehicle division to Artix, a County Durham firm. The new division was named AWD. About 1,200 staff at Bedford, mostly long-serving employees in their late forties and fifties, were covered under the union-negotiated Vauhall redundancy agreement.

This states that anyone over 55 who has completed at least 10 years' service and is made redundant, will get a pension based on the number of years' service with the company, without penalty for early retirement.

In a video intended to reassure staff, David Brown, AWD company chairman, said of the redundancy terms: 'Whatever they were under GM (they) are just carried forward.

'GM will transfer to the new company all the assets that would be needed to keep in place the pension rights that you all have.'

Staff were given a choice of joining the new AWD scheme and building up their accrued benefits with Vauxhall or doing the same with a separate General Motors scheme with different benefits.

John Audley, aged 61, is a former Vauxhall and AWD employee. He said most staff opted to stay with Vauxhall because they were reluctant to put their benefits in a new scheme.

Yet by remaining within Vauxhall's pension fund, they were letting slip the enhanced redundancy benefits.

The minority who joined the AWD scheme have been able to draw their pension entitlements from it, including the redundancy terms.

The majority who did not will not be able to get them until they are 62.

Mr Audley said: 'I would have been entitled to a monthly pension of pounds 720 under the General Motors scheme. Because I took my pension early, I have received pounds 450.'

Mr Hand added: 'The vast majority of Bedford staff were over 50 years old. Had they been made redundant, many of them would have got full or near-full pension.

'As things stand now, they can only get their full pension at 62 or over. For every year they retire before then, they lose 5 per cent of their pension. If they were 55 when the plant closed, that comes to a total loss of 35 per cent.'

A statement by Keith Benjamin, Vauxhall's in-house legal adviser, said: 'Those members who elected to transfer their past service benefits to the AWD pension scheme were given mirror benefits for past service - including the right to the unreduced redundancy pension.'

Mr Benjamin's statement added that those who took up his company's offer to leave their pension fund in either of the General Motors schemes would not receive the early retirement package.

In the case of Mr Audley, he voluntarily opted for the General Motors scheme when he transferred to AWD.

(Photograph omitted)