pension schemes dumped
WORKERS, DEC 2004 ISSUE
Workers who have paid into pension schemes all their working lives have a right to expect a decent return during old age. But a comfortable retirement is under threat from companies and government alike. During the 1990s many large companies used the opportunity of a high stock market to keep profits up by robbing workers' pension funds. Now, with a low stock market they are abandoning their pension schemes altogether, investing the funds abroad or demanding higher contributions.
In the public sector the government is forcing through changes which will leave workers facing the prospect of working until 65 (or even 70) with reduced benefits. The government intends to pass the burden of old age back to the workers.
Attacks on pensions are planned across the public sector, showing how predictably hollow were the decisions taken at the Labour Party's policy forum in Warwick. The "pledges" there were geared to win unions around to support the government over Iraq at the Labour Party conference. They succeeded, to the sham of a silent labour movement, and now the promise will be dropped. This is hardly surprising given that both Tory and Labour governments since 1995 have adopted the policy of issuing no more government gilts, which previously underpinned and guaranteed final salary pension payouts. Unison has already indicated that to defend members' pensions it will look to industrial action.
For the heads of large corporations the future has improved. The EU has issued directives freeing them from any notion of responsibilities in Britain. In tandem with this, pension provision for employers and directors is running against the tide. This privileged minority will see secure pensions, often in excess of £1.5 million per individual director. A retirement in luxury for a minority, poverty and more work for the majority — if we accept it.