INDUSTRIAL action is not currently on the cards at the Mini plant despite employees being "very unhappy" about changes to pension schemes, Unite has said.

This week BMW, the owners of the Cowley car plant, announced that some 2,000 employees in Oxford would be affected by the stopping of their old final salary pension scheme and the move to a defined contribution scheme.

Some workers stand to lose six-figure sums over their years of work as a result.

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In the coming months Unite will carry out a consultative ballot of its members in the area but it is not likely to address strike action.

National officer for the automotive industries Tony Murphy said: "It's a survey gauging members' opinions.

"We haven't decided what's going to be on the paper yet and we aren't anywhere near taking industrial action yet.

"I challenge anyone to tell me the last strike we have had in the car industry; you're going back to the 1970s or 1980s.

"We don't want to jeopardise any future investment in the site. But all the indications we are getting are that people are very unhappy about this."

Employees found out this week by letter about the proposed changes, which BMW says will address a pension deficit and ensure pensions are sustainable for the future.

One worker, who asked to remain anonymous, said: "One of my colleagues in her early twenties has calculated that if she was to remain on her current salary for the rest of her career and keep her contribution stable at the same rate, the proposed changes would mean she would be around £9000 a year worse off at retirement.

"Just how much more are the younger generation supposed to take a battering?"

Bosses have called meetings with pension committees and shop stewards at all four BMW sites in the country, including Oxford.

Mr Murphy added: “It is becoming increasingly too easy for highly profitable multi-national companies to energetically salami-slice workers’ pensions in pursuit of even greater profits.

“BMW is blaming both the increase in national insurance payments and the cost of future liabilities as to why the final salary pension has become unaffordable, although, ironically, profits are still rising in the last two quarters.” 

A 60-day consultation period is to begin on Thursday.

Workers received a letter notifying them of the changes yesterday.

  • HOW IT WORKS 

Final salary schemes are an increasingly rare type of pension scheme used by some firms, public bodies and the NHS. 

The benefits employees receive at retirement are based on their earnings and length of membership in the scheme.

Those currently signed up to the old schemes at BMW pay a flat 10 per cent of their income into their pension, matched by 30 per cent from the company, and only need to continue working to grow their pension.

By contrast in a defined-contribution scheme employees can pay as much as they like into a money-purchase scheme but the value of their pension is based on the stock market’s performance rather than their salary.

If plans go ahead the maximum pension an employee at BMW receives will be 26 per cent of their income, rather than 40 per cent.

In general final salary schemes are becoming less common, while in the public sector benefits have been reduced and contributions increased in recent years.

In 2010 it was revealed that Oxfordshire County Council’s pension deficit had gone up by £194m to £752m in a year. 

At the time the council was contributing 19.3 per cent of pay towards the cost of workers’ pensions.

The plant employs some 4,500 people, including staff from more than 20 EU countries.

An employee in his 40s, who asked to remain anonymous, said: "They’re going to be handing out leaflets everywhere saying they are stopping pensions to everybody on final salaries, of all age groups.

"They have been trying to stop it for years.

“A friend of mine has been here 30 years and could lose about £90,000. I am going to be a lot worse off.

“The unions are trying to negotiate and members on the shop floor are asking for strike action if it goes ahead."

Another worker added: "With massive profits and record sales always being reported why do they feel the need to keep taking from the work force? 

"They are constantly looking at ways to get more cars while laying off staff and have workers take on more. 

"Me and my family are stuck in private renting, paying extortionate rent so unable to save to buy. The only real hope is when we retire but that looks like it might be scuppered now  thanks to BMW's penny pinching."

Local branch conveyor Norman Gough said the pension scheme had been closed to new starters four to five years ago.

He said: "For a profitable company we think there are solutions we could find where it could be kept open.

"It's already got out on the shop floor and we are getting emails not just from them - it affects managers as well - that are obviously quite irate. One said 'I've been paying into my pension for 35 years and now they're taking it away from me'.

"We are all in this together. It's not going to be shop floor workers fighting management. They've had a plan to shut it for a long time but they might be biting off more than they can chew."

Andrew Smith, the MP for East Oxford, also reacted to the news this morning.

He said: "It is a blow to workers’ future pension prospects. As there is a period of consultation starting, I would very much hope that this can be tackled through negotiation and an outcome secured which is fair to the workforce which has delivered so much for the success of MINI and BMW.”

BMW group spokesman Steve Wrelton said: “BMW Group is proposing to close its two UK defined benefit pension schemes to future accrual from 1 June 2017 and this affects around 5,000 staff across all of the company’s UK operations.

"If implemented, all staff would join the company’s market-leading defined contribution scheme. This pension scheme was launched in early 2014 for new starters and now has over 2,000 members.

"Many UK companies have significant pension fund shortfalls in their defined benefit schemes and the cost and risk associated with these schemes is making them increasingly unsustainable and unaffordable for both members and companies.

"BMW Group has always prided itself in providing excellent pensions for its staff and wants to act now to protect future pension provision for all its staff and to help protect the cost competitiveness of the UK as a manufacturing base. The company is now consulting with our employee representative bodies on this proposal.”

  • Pensions expert Ed Gibson said changes to BMW's pension scheme were inevitable. Read what he has to say here