'Classic example of bandit capitalism'
First Group Pensions: Coast Capital can’t be allowed to prevent black hole being plugged
Unite which represents thousands of members at transport company First Group, is demanding that venture capitalists Coast Capital Management are thwarted in attempting to block a planned move to plug the deficit in the company’s pension fund.
First Group recently sold its US division First Bus for $4.6 billion. As a result the parent company First Group is proposing to pay shareholders 10 pence a share as a bonus as well as spending £360 million in plugging the company’s pension deficit.
However Coast Capital which has previously tried to purchase various First Group divisions is opposing the plan and is seeking to secure the support of other shareholders to oppose the pension payments. Coast Capital are instead arguing that the £360 million should be paid to shareholders as a form of dividend.
Unite members are alarmed at the development as there has been growing concern at the size of the pension deficit, with fears that if action isn’t taken workers’ pensions could be placed in jeopardy.
Unite has long campaigned for tighter rules to be imposed on how companies manage pension fund deficits and that paying bonuses and shareholder dividends must not be given precedent over pension fund payments.
Unite national officer for passenger transport Bobby Morton said, “The actions of Coast Capital are despicable and this is classic example of bandit capitalism.
“Coast Capital are trying to line their own pockets, while jeopardising the retirement income of our members,” he added.
“First Group are doing the right thing in acting to plug its pension fund deficit and they should not be blocked from taking this responsible action.
“Unite will be stepping up its campaign to oppose any attempt to prevent the plugging of the pension back hole, especially in the run up to First Group’s AGM later this year,” Morton continued.
“Shareholders who support Coast Capital’s threat to workers’ pensions will be exposed for their greed and named and shamed.”
By Barckley Sumner