In a potential blow to 2017 plans, employees are to vote Friday on whether they should strike at MINI Plant Oxford due to a change in retirement benefits. The Guardian has this helpful guide to what’s at stake:
The Union said that BMW had refused to lift its threat to close the final salary pension plan by the end of May, when it plans to move to the less generous defined-contribution plans.
Similar to how pensions worked for years in the US “defined benefit” or “final salary” pensions were the main way most people saved for retirement.
In “defined benefit” schemes you and your employer save and the retirement income you receive is based on your years on the job, the accrual rate, and salary.
It’s worth noting that many companies in the UK shave moved in this direction to cut costs and remain competitive. But that begs the question – should MINI follow them or continue to reward its highly valuable workforce?