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GMB union accuses Cadent Gas of ‘money-grabbing’ cuts to pension scheme
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By Nagasunder in UK Business News, posted July 3, 2023
Cadent Gas is facing accusations of staging a "cost-cutting money grab" by considering cuts to its pension scheme.
The company, which was formerly part of National Grid and is the largest gas network in Britain serving 11 million people,, has been under the control of a consortium led by Macquarie, the Australian banking powerhouse, since 2016.
Trade unions are expressing anger over the potential closure of Cadent's defined benefit pension scheme, and there are discussions about possible strike action in response.
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The scheme, which closed to new members in 2002, currently has 430 active employees with at least 20 years of service, along with several thousand retired members.
Cadent is reportedly considering closing the scheme in order to redirect the investment towards new technology and workforce training.
The GMB union, representing workers at Cadent, argues the defined benefit scheme is fully funded and in surplus, costing the company approximately £10 million per year to service.
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Gary Carter, a national officer at GMB, said: “This is a cost-cutting money grab by Macquarie to increase profits and dividends to shareholders.
“The pension scheme is not in trouble; it’s fully funded and in surplus. Cadent Gas makes hundreds of millions of pounds’ profit and pays large dividends.
“These are long-serving and skilled employees who have given many years of service in the gas sector, serving communities and customers.
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“Cadent was well aware when it purchased the business that the pension scheme was there and it has a moral and financial obligation to it.”
They view Macquarie's actions as a move to increase profits and dividends for shareholders, rather than addressing any financial difficulties.
Cadent recently reported a profit of £945 million in the 2022-23 financial year, up from £685 million the previous year.
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It paid a £350 million dividend to shareholders and had net debts of £7.4 billion. The defined benefit pension scheme was reported to have a surplus of £729 million in 2023, down from just over £1 billion in 2022.
The chairman of Cadent, Sir Adrian Montague, has been appointed to replace Ian Marchant, who held the same role at Thames Water, another Macquarie-owned company facing financial concerns.
Thames Water's chief executive, Sarah Bentley, recently resigned, sparking worries about the company's financial stability.
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Macquarie has faced criticism for its ownership of Thames Water, with allegations that it left the company with substantial debt.
Concerns have been raised about Thames Water's operational and environmental performance, including issues with leaks and sewage discharge into rivers.
The Universities Superannuation Scheme (USS), one of Thames Water's major shareholders, has expressed support for the company's turnaround plan and net-zero roadmap.
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Other significant shareholders in Thames Water include the Ontario Municipal Employees' Retirement System and subsidiaries of the Abu Dhabi and Chinese sovereign wealth funds.
Both Macquarie and Cadent declined to comment on the situation.
