by Keith Richmond
THE TUC has condemned threats to cut costs during the credit crunch-inspired recession by plundering employees’ pension schemes.
Nigel Stanley, head of campaigns at the TUC, said: “There are two million fewer workers in final salary pension schemes now compared to the late 1990s. Only one worker in five in the private sector still has such a pension and even these final salary schemes are being starved of funds.
“The TUC estimates that 86 per cent of final salary schemes are now in deficit – compared to 69 per cent just one year ago. This is taking a huge toll on millions of people who are seeing the value of their pension funds plummet.”
The threat to workers’ pensions was revealed in a new report by the influential accountancy giant PricewaterhouseCoopers.
The business-friendly firm – one of the big four auditors along with KPMG, Deloitte and Ernst & Young – has urged bosses not to “ignore a pension scheme’s potential impact on a business’ robustness – and even survival”.
The report – called Surviving the Credit Crunch – claims that companies which still have a defined benefit pension scheme are concerned they will not be able to afford any increase in employer contributions in 2009.
Four out of five firms have already closed such schemes – which provide a pension based on final wages – to new employees and the report suggests one in five of those still open will be closed this year.
The report from PwC – formed 10 years ago after a merger between Price Waterhouse and Coopers & Lybrand – concludes: “With the current paucity of available debt refinancing, it is essential that companies address their pension commitments.”
The TUC is furious about this invitation to attack employees’ pension funds and imperil workers’ future financial security – and pointed out that the Chancellor has already helped bosses save £4 billion in cuts to employer pension contributions.
