STEP bosses in firing line
There were this week calls for ‘clarity’ from bosses at an arms-length Stirling Council body after changes were made to the pension arrangements of around 20 staff there.
Board members of business support group STEP were told in a letter from a former employee, dated last month, that a decision to leave Falkirk Council Pension Fund would have a detrimental impact on staff members’ retirement incomes.
It was also claimed in the letter that there was not sufficient scrutiny of the organisation by its major shareholder Stirling Council.
Mid Scotland and Fife MSP and Scottish Conservatives’ local government spokesman Alexander Stewart said this week: “I am deeply concerned at these claims being made regarding STEP Stirling.
“Accurate, transparent governance and scrutiny are vitally important, especially with corporations of this structure and I will be writing to all concerned seeking clarity regarding these allegations.”
The decision to leave the defined benefit scheme was taken by STEP management in September and the unnamed correspondent insisted that staff had been left in the dark about future pension provision arrangements.
The letter states: “The rationale behind the decision to close the pension scheme is said to be based in financial sustainability. In short, that STEP cannot afford to make pension contributions at the current levels.”
Remarks were also made in the letter about the wages and responsibilities, compared with other public servants, of STEP chief executive Gordon Bell and company secretary Jim Forrest.
The letter claimed that Mr Bell’s pension arrangements had been unaffected by the recent pension changes.
The Observer specifically asked STEP if it could confirm this but a spokesperson insisted it would be inappropriate to comment.
Figures in Stirling Enterprise Park Limited’s financial statement for the year ended March 2018 lodged with Companies House show defined benefit obligations to be £3.9million at the end of 2018 and £4.2m at the end of 2017.
It was pointed out in the letter: “Staff turnover continues to be extremely high. Eleven staff members, nearly half of the total number of employees have left since January 2018 which speaks volumes about the level of dissatisfaction.”
The correspondent also insisted that the organisation had moved away from being one which had been designed by Scottish Enterprise to nurture and encourage enterprise and entrepreneurship to one concerned with sales activity, adding: ‘The integrity of the organisation is diminished and is no longer capable of delivering its key strategic objective of promoting enterprise in Stirling.’
But STEP human resources manager Vicky Murphy said STEP was a private company which paid the Living Wage, adding: “Employees have an excellent staff benefits package which is regularly reviewed. Annual pay reviews are a board decision and it would be inappropriate for any one at STEP to comment on any of our team members salary. The team at STEP work hard to ensure we continue to have funds to invest in our local business support activity, now and in years to come.”
She also stressed that small companies “such as STEP” with defined benefit pension schemes had been finding increases in pension costs to be unaffordable in recent years.
Ms Murphy explained: “A number of local companies including STEP, were offered a one-off opportunity, to withdraw from an historical pension arrangement, without incurring a seven-figure financial liability and protecting current and previous employees accrued benefits in the existing scheme.
“Making any changes to employee benefits is not easy and decisions are only made after careful consideration and with regard to all legal requirements being met.
“Staff engagement sessions and communications are a regular occurrence at STEP and ensured staff were kept informed while a review of the offer was undertaken and options for future pension arrangements were thoroughly and carefully considered. The team has been engaged throughout this process and individuals have had private meetings with an independent pensions adviser to make the right decision for each of them.”
Responding to criticism about scrutiny of STEP, a Stirling Council spokesperson said this week: “STEP provides a valued resource to the business community and reports to our finance and economy committee.
“Our audit committee also has an annual overview of all Arm’s Length External Organisations (ALEO) and partner organisations, both of which allow the Council to strengthen finance and governance.”
To comment on this story: email john.rowbotham@trinitymirror.com, or write to the Observer at 34 Upper Craigs, Stirling, FK82DW.