On the go: The AA is considering closing the last section of its defined benefit scheme still open to future accrual, with 2,800 employees expected to be transferred to one of its defined contribution plans.
The British motoring association stated that all accrued benefits in the scheme will be protected, and that closing the final salary plan “is in line with what most responsible companies have already done”. The change is subject to a 60-day consultation.
“In fact, 95 per cent of FSTE 250 companies no longer have fully open DB schemes,” a spokesperson said.
The AA Pension Scheme has five sections, with only the career average revalued earnings category still open to future accrual.
According to its latest annual report, the scheme was 83 per cent funded at its latest triennial valuation, in 2016, having a £366m deficit.
The AA spokesperson added: “We have briefed our 7,500 employees this week and are also briefing our recognised trade union, the [Independent Democratic Union], and our management forum, which represents management employees. We have already briefed our pension trustees.
“Some 2,800 employees out of 7,500 are in the DB scheme. The proposal does not affect any employee who joined after October 1 2016 and who is already in one of our DC schemes.”
However, the GMB union has already criticised the decision, arguing that thousands of loyal AA workers face a retirement “nightmare” as the consultation begins.
Paul Maloney, GMB regional secretary, said: “For many workers this will leave their retirement dreams in tatters – all thanks to the miserly actions of money-grubbing AA bosses, desperately trying to service huge debts that should never have been allowed to accrue in the first place.
“GMB has requested urgent meetings with the company in order to get a better understanding of the proposed changes, and will fight tooth and nail for our members’ futures.”
