Audit giant 'bullying' on pensions

ERNST & YOUNG has been accused of bullyboy tactics after allegedly threatening 1,300 British employees with the sack unless they sign up to inferior pension arrangements.

UK staff at the Big Four accounting firm who until now have been on an attractive final-salary scheme, which guarantees benefits, were given until 5.30pm today to choose between one of two new pension options.

According to one furious E&Y veteran, staff - including hundreds in London - have been warned by letter that they risk having their employment contracts terminated unless they sign up.

'It's absolutely disgusting,' said the employee, who wished to remain anonymous. 'It's bullyboy tactics. They're holding a gun to our heads.'

Staff attempting to protect their rights by signing up with the proviso that it was done under protest have been called at home by a senior E&Y partner and told this was unacceptable.

But in a furious response, E&Y, chaired by Nick Land, accused its own rebel employees of 'scaremongering,' talking 'absolute twaddle' and 'spreading blatant disinformation'.

The firm, which audits a string of blue-chip companies, conceded there was a 5.30pm deadline, but insisted staff could choose a third option of continuing to consult. It also claimed that a formal pressure group of staff created to fight for better pension terms was planning to apologise over allegations made during the dispute.

Spokesman Kevin Russell said staff had been fully consulted over the changes. The rebels were 'attempting to ambush and unravel all the hard work done by everyone' in creating the new pension terms. 'It's inevitable there will be a couple of dissenters,' he added.

He dismissed as 'unconnected' and 'silly', allegations by the rebels that the original pension fund was only in deficit because partners had been too greedy in pocketing a £190m windfall from the £8bn sale of the consulting division to Cap Gemini in 2000.

Ernst & Young closed its final-salary scheme to new recruits several years ago, but today's row is about its decision to go much further and close the scheme to existing members - around one-fifth of the UK workforce.

Members are being given the option of either sacrificing their accumulated benefits and joining an enhanced defined contribution scheme, or retaining their benefits and going on to a standard defined contribution scheme.

The rebels claim the first option has the effect of forcing them to accept a 5% pay cut from Monday. E&Y declined to discuss the terms.