FirstGroup, a large UK bus and railway company, is setting up a single defined benefit pension scheme for employees. The new career-average final salary scheme will have an initial active membership of 12,000 and a fund size of over 250 million.
Following the privatisation of the UK bus industry in the 1980s, FirstGroup has grown by acquiring bus companies throughout the country. This resulted in the UK Bus Division operating approximately 35 pension schemes. The pension arrangements are now being rationalised into one scheme for all employees of the UK Bus Division.
Mercer Human Resource Consulting has been appointed to provide administration services and investment advice to the trustees of the newly established First UK Bus Pension Scheme. “We seldom see new final salary arrangements being established nowadays and we are very proud to have been awarded this prestigious assignment with FirstGroup,” says Mike Tyler, Worldwide Partner at Mercer. “We look forward to providing a top-class service for the new scheme.”
Jardine Lloyd Thompson was the main administrator of the funds before, while Hymans Robertson hold the corporate investment appointment. Mercer was in competition with Aon, Barnet Waddingham, Capita, Hewitt Bacon & Woodrow, Jardine Lloyd Thompson and Watson Wyatt for the administration appointment, and Aon and Hymans Robertson for the investment appointment. “We were impressed by the level of competence and professionalism demonstrated by the Mercer team,” says John Chilman, Associate Director – Reward & Recognition at FirstGroup.
FirstGroup plc is a passenger transport company employing over 57,000 staff in the UK and North America. It has two main divisions that operate in the UK – the UK Bus division and UK Rail division. The UK Bus division has approximately 27,000 employees. First Group plc is listed on the UK stock exchange and in the year ended 31 March 2003 had a turnover of 2,291 million