Babtie has now changed the terms of the existing members' final salary scheme. Rather than paying out an amount to pensioners linked to their final salary, it will link it to the average salary the employee received in their time with the group.
Finance director Mark Cubitt said that the decision was made in consultation with staff, who had accepted that this would ensure that Babtie could meet the funding requirement of the final salary scheme. He added: "Here is a promise that we can keep. Staff accepted that it is a balanced approach – it is kind of a halfway house between a final salary and money purchase scheme."
The deal should placate unions, who complained last year when contractors ROK and Alfred McAlpine forced employees on a final salary scheme to relinquish it and accept a money purchase pension instead.
Cubitt was speaking shortly after Babtie announced its 2003 results. Pre-tax profit in 2003 was £7.8m, up 51% on the previous 12 months. The company's net debt has been eliminated, giving it room for acquisition.
Chief executive Bill Mitchell said that he wanted to double the £179.4m turnover within five years, and increase its operating margin to 10% from 7.6% in 2002.
Mitchell also made a U-turn on Iraq. Last year he said that the company would be interested in work there, but he now said that the security situation has deteriorated too badly over the past six months to risk sending staff.
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