Pensions, Retirement and Old Age

to 'step up' pension fight

Trades unions will need to "step up" their defence of pension schemes in the coming year, the TUC leader has said.

Brendan Barber said in his New Year message that tough choices were needed to deal with the "looming crisis".

He said Britain had gone backwards in its pension provision as some employers abandoned their responsibilities.

Mr Barber said only one in four private sector employees was now a member of a good occupational pension scheme and that the downward trend would continue.

He added that while many firms had already shut their final salary pension schemes to new members, Rentokil Initial recently announced plans to close its scheme to existing members too.

The firm's decision would have "rung alarm bells in every workplace with a decent pension".

"Pensions will therefore continue to top the trade union agenda. In the year ahead we will have to step up our defence of existing pensions," he said.

He was critical of company directors, saying too many were prepared to tighten the belts of workers, while boardroom pension schemes continued to guarantee huge payouts.

Mr Barber said there was wide support among unions for many of the basic elements put forward by Lord Turner's Pension Commission in its recent report.

These included increasing the basic state pension in line with earnings, basing eligibility for the state pension on residency, introducing a universal pension for the over-75s and creating a National Pensions Saving Scheme with compulsory employer contributions.

But Mr Barber warned that the report presented tough choices.

He said: "More generous state pensions will have to be paid for through the tax system, particularly if we resist raising the state pension age.

"Some of that should come from looking at the big handouts in tax relief on pensions paid to higher rate taxpayers, but it will mean over time a bigger tax burden."

The government deserved credit for the strength of the economy, investment in public services and introducing new rights at work, said the TUC general secretary in his message.

But he added that too much of the public sector reform programme risked alienating the very staff who had to implementing it, with the prime minister's "ideological" preference for introducing private companies into the provision of services such as health and education.

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