The Scottish Trades Union Congress (STUC) have expressed alarm at reports that five out of twenty of the UK’s largest private sector companies are announcing intentions to close final salary pension schemes to all employees within the next few years.
The STUC believe these companies are using the recession as a cover to escape a pension obligations problem that was largely of their own making and that valuations of future liabilities based on the current state of the stock market is short sighted and wrong.
STUC is also concerned that panic action on final salary pension schemes might herald further pressure on pensions in the public sector with a net effect that, in both sectors, fewer people will be making proper provision for their future.
STUC General Secretary Grahame Smith said “The trade unions have consistently argued that it is unacceptable to transfer the risk of pension provision to employees, the only population who are entirely blameless for the current situation.
“Employers have used defined contribution or money purchase schemes to reduce contributions to towards members’ pension funds reducing retirement income. They appear to forget the decades of scheme surpluses and their resultant contribution holidays which were rarely passed on to scheme members.
“Employees who had access only to less secure defined contribution schemes, are scheduled to retire at a time when share prices have plummeted. Now these members of inferior defined contribution schemes have to reconsider retirement plans as pension pots have been decimated. “Paradoxically, we are seeing the failed chief executives of financial institutions, the very ones who took unacceptable risks, being ousted with very healthy multi million pound pension pots.”
ENDS
For further information contact Ian Tasker Assistant Secretary STUC 0141 337 8100