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Pension 'crisis' looming

BBC News, September 8, 2002

The TUC says pensioners are not getting a fair deal

  TUC general secretary John Monks criticised British companies who have removed the schemes, and are then making only a "mean" contribution to employees' replacement pensions.

The TUC said it wants to restore the link between state pensions and earnings.

But the CBI responded by saying it was unrealistic to expect employers to make compulsory contributions because these were too costly.

Costly alternative

The TUC is making two key demands. It wants all companies to offer final salary pension schemes and also wants to make it compulsory for employees to join them.

Unions said on Sunday that the pension debate is now the top industrial relations issue and should be part of any negotiating package.

The TUC said companies are not putting enough into new alternative pensions and that workers are struggling to make up the shortfall.

"Even decent employers have betrayed decades of trust as they give in to City pressure to scrap quality pensions", said Mr Monks.

"Corporate Britain, with some notable exceptions, should be hanging its head in shame," he added.

Unrealistic

However, the CBI is calling for a more moderate approach to the issue.

It wants a debate on pensions but says companies would struggle to keep paying the traditional schemes.

"Unions must stop playing the blame game if they want to generate constructive proposals as well as headlines," said the CBI.

The debate came on the same day as a report from the stockbroker Comdirect, suggesting more than a quarter of pensioners live on incomes of less than half the average wage.

Savings regrets

The Comdirect survey suggested over a third of pensioners wished they had saved more before retiring.

But the group also suggested young people are being put off investing by the unpredictable nature of the stock market.

Comdirect said its survey highlighted the need to "stop putting off today what they could do tomorrow".

TUC calls for tougher pension laws

BBC News, September 9, 2002

The Trades Union Congress ( TUC) has backed calls from its members for a new law on pensions, to prevent what they see as the threat of "pensioner poverty" as company schemes dwindle.

The TUC wants to force all companies to provide more substantial pension schemes, with a 10% contribution from employers and 5% from employees.

It also wants to make it compulsory for workers to join the schemes and for pension pay to be given the same level of protection as current pay.

Members said employers had reduced pay and conditions to their worst level since the Second World War, by not contributing enough to new pension schemes.

In an emotive debate at the Trades Union Congress in Blackpool on Monday, union leaders said the government should act immediately to help the millions of people without work pensions.

A union member also warned that the pensions crisis could hit the government as hard as the poll tax did the Conservatives.

The general secretary of the Iron and Steel Trades Confederation (ISTC) Michael Leahy, told the conference: "The government must act to prevent future generations of British pensioners being poorer than their parents and even their grandparents".

New rules

The TUC also wants to make it compulsory for workers to join the new schemes and for pension pay to be given the same level of protection as current pay.

It is also calling for the government to create a fund to protect pensions in case a company goes bankrupt, and for the government to give companies better tax breaks on pensions.

The TUC deputy general, Brendan Barber said he expected to see more strike action protesting against the closure of final salary schemes.

Counter claim

The CBI has responded to union claims by saying that the rising cost of final salary pensions had forced employers to look at other options.

Digby Jones, the director general of the CBI, described threats of protest strikes as a " knee-jerk reaction".

He added: "I didn't think that this was what British business, British employers and British unions would have to put up with in the 21st century".

But TUC claims companies "seek to fatten up their margins by paying less and offering poor terms on pension scheme membership".

General secretary John Monks said: "If people are messing around with pension rights, I consider that a strong case for strike action".

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