Trades union Unite has alleged that private equity firm Electra Partners has “reduced” the pension benefits of 46 Lil-lets employees following a change in policy.
Unite claims that 46 Lil-lets employees believed that they would receive their consent pensions from the company as a result of the plant closure.†
But after buying Lil-lets, the feminine hygiene product manufacturer, Electra axed the previous policy under which workers aged 50 years and over could draw their pensions with no actuarial reduction for early retirement at sites that were closed down.
The Amicus section of the union has said that this change of policy will, in some cases, effectively mean a reduction of the pension by 30% on what was initially expected.
Lynne Shakespeare, Unite official, said: “This will mean that workers over 50 will only receive a vastly reduced pension leaving many of them to work on past normal retirement age to make ends meet. These people will also face difficulty in finding employment at the same level they are currently receiving.”
However, the union accepts that the issue is not a matter for the Pensions Regulator because the company was entitled to refuse to enhance retirement benefits.
Duccio Baldi, chief executive of Lil-Lets UK said that the pension fund had been in deficit for a number of years and in 2004, the then owners of Lil-Lets made a decision, in conjunction with the trustees, to stop giving blanket consent on redundancy and that Electra was merely maintaining this policy.
Baldi said: “I think in this day and age to expect to be able to retire with an enhanced pension in your early 50s is not a position that we find realistic or responsible in terms of the way we have to manage that fund.”