MSF accuse Shorts' owners of underfunding pensions

UPDATE:

Former union officials have launched a scathing attack on Shorts' parent company Bombardier, accusing them of "failing to honour commitments" and underfunding workers pension provision to the tune of £160 million.

The MSF (Staff) Union claims that Bombardier took a “contributions holiday” for approximately 10 years, which effectively reduced Bombardier's wage bill at Shorts by around £8 million a year. The union further accuse Bombardier of "transferring massive cash dividends from Shorts to Canada" totalling £195 million during the financial year 2000/01. This cash dividend, claims local MSF branch president Kevin Doherty, was over and above the operating profit of £57.7 million for that financial year.

When averaged out, he suggested, this reflected a potential deficit of £10,000 to each of the 15,000 pension scheme members entitlement.

However Bombardier issued a statement countering the claims saying that despite the fact that the scheme shows a deficit of £33 million, it does not affect the benefits to which pension scheme members are entitled.

The company added: "Employees, both past and present, have no need to be concerned – the company is committed to retaining its final salary defined benefit scheme."

New accountancy rules developed by the Accounting Standards Board, known as FRS 17, now provide that companies should disclose pension fund assets and liabilities in their annual reports. As assets are measured by market climate, pension funds can show fluctuations depending on the performance of the funds.

However, former Belfast Short's staff union representatives launched an attack on Montreal-based Bombardier following last week's publication of the annual statement for the year ending January 31, claimed that the figures indicated the company had failed to "honour written commitments".

Bombardier emphasised that it recommenced contributions to the pension scheme in February of this year – outside the consideration of last week's report.

The company confirmed that the recommenced contributions in February were made at the rate of 6%, however, critical of this package, a union source claimed the level of contributions needed to shore up the deficit would be nearer 12%.

(GMcG)