by René Lavanchy
THE TUC has clashed with the CBI after the Government announced it may relax employers’ obligation to cover holes in occupational pension schemes.
Pensions minister Rosie Winterton announced last week a consultation on rewriting Section 75 of the 1995 Pensions Act, which makes employers liable for any shortfall in the pension scheme if it is wound up in a company restructuring.
Company bosses currently risk fines if they do not ensure pensions are fully funded. But the minister suggested this liability could be abolished if employers have made a commitment to the schemes. Unions are worried that employers could walk away from pension obligations even if they are solvent.
Ms Winterton said: “We are seeking views on the possible options for not triggering a debt where the employer remains committed to the pension scheme. Where government can help ease the burden on employers who run pension schemes at this time we should, but not at the expense of protecting people’s pensions.”
The CBI, which has lobbied for a change in the law, welcomed the announcement. Deputy director John Cridland said: “These proposals are very welcome, and would remove funding rules that currently do not improve pension security for employees, but add massive costs to companies looking to restructure”.
But TUC general secretary Brendan Barber warned that Section 75 provided “important protection”, adding: “Either companies meet their pension scheme liabilities or they don’’t. We doubt that any review can overcome this fundamental point”.
