Labour union Unite has lambasted Fujitsu services over plans to close its final salary pension scheme to both new and long-term staff.
Some 4,000 employees who are in the defined benefit pension plan have begun receiving letters from the company informing them that Fujitsu services proposes to close the final salary pension scheme and is starting a 90-day consultation process. It is highly unusual for firms to limit the pension benefits of long term employees.
The final salary scheme was running at a £1 billion deficit, a Fujitsu spokesperson told CIO sister title Computerworld UK.
A Fujitsu spokesperson said all pension benefits accrued to date in the final salary scheme will not be lost. "We are closing the plan for future accrual, but all money retained to date will be kept," he said.
Instead, Fujitsu will offer affected workers membership in a money purchase pension scheme. A money purchase pension is a defined-contribution plan where employer contributions are fixed and money is invested, for example, in the stock market. Unlike final salary pension schemes, there is no guarantee that a pension fund will pay out a set amount on retirement.
Peter Skyte, Unite National Officer, reacted angrily to the news. “Fujitsu Services is a highly profitable company and made £177m profit in the last financial year," he said.
“The company has yet to produce any proper justification for this latest attempt to raise profits by cutting pension benefits, and this action may hinder future bids for blue chip private sector outsourcing contracts."
“We will be mounting a robust campaign to persuade the company to think again.”
But a Fujitsu spokesperson said: "The decision was made with regret. The reason was to reduce costs to remain competitive. Our customers are looking to cut costs and if we don't have that competitive edge, we may not get that business."
Fujitsu has made a number of cutbacks to its employee benefits in recent times, curtailing bonus payments in 2008 and putting in place a pay freeze during 2009.
Unite also accused Fujitsu of not allowing staff to attend medical appointments in work time and cutting ‘out of hours’ payments, but Fujitsu spokesperson denied this was a policy and said the company has a grievance programme for complaints.
Fujitsu employs 14,500 staff in UK and Ireland. Of these, 3,500 employees are in the final salary pension plan.
Fujitsu said it is in talks with Unite and will consult with staff for the next 90 days.