Fight The Great Pensions Robbery

PENSIONS MINISTER Andrew Smith recently announced a Ł400 million pensions compensation package. But this reform was only squeezed out of the Treasury to save the government's Pension Bill.

Dave Carr

With threats of trade union strike action and a major TUC-backed demo on 19 June over the issue, 209 Labour MPs threatened to wreck the Bill.

Some trade union leaders will see this compensation as evidence that the Labour government will listen to the unions. But Ł400 million for 60,000 workers, spread over 20 years, only provides about Ł7 a week - less than most workers paid out their salaries in weekly contributions. And it doesn't compensate workers whose schemes ended after their companies went bust before 1997.

A pensions expert ominously issued a warning about public sector pensions last week. Gordon Pollock, chair of the Association of Consulting Actuaries said: "I simply do not think it will be sustainable for the only people who have good pensions to be people working in the public sector."

Final salaries

The final salaries pensions crisis arose after the late 1990s stock market boom went bust. In the boom years many companies took 'pensions holidays' ie stopped replenishing their pension funds and instead pushed up shareholder dividends and chief executives' pay and perks.

The resulting deficit in UK pension funds was staggering. From a surplus of Ł80 billion in 2000 the pension funds became a Ł160 billion deficit by June 2003. And despite reducing that deficit by about Ł60 billion by the end of last year (due to stock markets recovering) many companies are still pulling the plug on final salary schemes.

One in four schemes closed last year alone. The TUC estimates that half Britain's biggest companies have closed salary-related pension schemes - the rate of closures amongst smaller companies is even higher.

Under-funded private and state pensions led governments in France, Italy, Germany and Austria, into attacking workers' rights by insisting that they have to work longer and pay more in contributions, for less of a pension.

The trade unions responded by organising strikes and protests, something which is now urgent in Britain. That is why Socialist Party members in the PCS civil service union initiated the call for a national march and rally to start a trade union campaign on pensions. This was carried at last year's TUC congress.

Pay Up for Pensions

March and rally

19 June

Assemble 12 noon, Embankment, London. Rally at 2pm in Trafalgar Square.

There will be a similar event in Edinburgh on the same day

Rail Workers Vote For Action Over Pay And Pensions

MEMBERS OF the rail union RMT, working for Network Rail, have voted to strike over pay, pensions and concessionary travel. 58% voted in favour of action in a 68% turnout.

Before the ballot result was declared, Network Rail had refused to negotiate over their 3% pay offer. The company had also closed its final salary pension scheme, without any negotiations with the union and imposed an inferior scheme on new entrants, which RMT general secretary Bob Crow described as "a glorified savings plan."

When the ballot result was declared, Bob Crow said: "Our members have made it clear that their pensions are not an optional luxury that can be cut to help boost the bosses' bonus fund.

"When we warned that even those left in the existing pension scheme would be facing ever-increasing costs to keep their pension benefits, we were called scare-mongers, but our members have seen through their 'I'm alright Jack' campaign."

Now the ballot result has been declared, Network Rail has agreed to talks. As yet no strike dates have been set.

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In The Socialist 29 May 2004:

The Real Cost Of War