Defined Benefit 

Aberdeen Airport closes DB scheme

Aberdeen Airport closes DB scheme

AGS Airports Limited Group, which owns Aberdeen, Glasgow and Southampton airports, has reached an agreement with its staff to close its defined benefit pension scheme.

Unite members at Aberdeen Airport voted to accept the latest offer from the company on a 98 per cent turnout with 60 per cent voting in acceptance, ending an ongoing dispute.

Airport workers at Aberdeen and Glasgow went on strike for two days in June to protest against proposals to shut the scheme, which Unite said broke an Acas agreement made in 2016 to keep it open to existing members.

In April, members supported strike action by 88.3 per cent on a 79.5 per cent turnout, after a 60-day consultation on closing the DB pension scheme was extended to allow for further discussions.

A spokesperson at AGS Airports said the DB scheme has now been closed, after workers accepted a compensation package which will see the remaining DB members receive 30 per cent of base plus shift pay, with a guaranteed minimum payment of £7,000.

She said: "With the cost to the company due to rise to 24.7 per cent per employee it was simply no longer affordable."

The remaining DB members will move into the company’s defined contribution pension scheme, which has an average employer contribution rate of 11 per cent, she added.

According to the Pensions Protection Fund Purple Book, only 12 per cent of DB schemes are now open to new members.

Overall, almost two thirds (63 per cent) of final salary plans in the UK are running at a deficit, with a combined shortfall of £161.8bn.

maria.espadinha@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.