The crisis-hit former owner of Thames Water has been accused by union leaders of staging a ‘cost-cutting cash grab’ on another key UK infrastructure asset under his control because it is appeared that Cadent Gas was considering reducing its pension plan.
Macquarie, the Australian banking powerhouse that owned Thames for a decade, has led a consortium controlling Cadent since 2016. Cadent, Britain’s largest gas network, serving 11 million people, was once part of National Grid.
It is understood Macquarie bosses are considering shutting down Cadent’s defined-benefit pension scheme, angering unions, who are consulting on whether to call a strike over it.
The scheme, which was closed to new members in 2002, has 430 active employees with at least 20 years’ service, as well as several thousand retired members.
It is understood Cadent is considering shutting down the program as it believes the level of investment required could be better spent on new technology and training its workforce.
The GMB union, which represents workers at the company, said the defined benefit scheme was “fully funded and surplus” and estimated that it was costing Cadent around £10million a year.
Gary Carter, a GMB national official, said: “This is a cost-cutting cash grab by Macquarie to boost profits and dividends to shareholders.
“The pension plan is not in trouble; it is fully funded and in surplus. Cadent Gas makes profits of hundreds of millions of pounds and pays large dividends.
“These are long-serving and knowledgeable employees who have provided many years of service in the gas industry, serving communities and customers.
“Cadent was well aware when he bought the business that the pension plan was there and that he has a moral and financial obligation to it.
Cadent last month said an increase in revenue helped it post a profit of £945m in the 2022-23 financial year, up from £685m the previous year. It paid a £350m dividend to shareholders and had a net debt of £7.4bn.
He said the defined benefit pension scheme had a surplus of £729million in 2023, up from just over £1billion in 2022.
Cadent also told the union that he pays disproportionately more into the defined-benefit scheme compared to the defined-contribution scheme, which has just over 6,000 members.
Last week, fears over the financial health of Thames Water emerged hours after the shock resignation of its chief executive, Sarah Bentley.