Thousands of employees face even lower pensions if high-ranking executives opt out of their companies’ schemes to avoid new taxes coming in next April, it has been threatened.
The measures, introduced by Labour Chancellor Alistair Darling but retained by his Tory successor George Osborne, will significantly cut tax relief on pension contributions for those earning more than £150,000 a year.
From next April, high earning middle management professionals will lose pension tax relief and be responsible for the tax shortfall for any contributions made by their employer. HMRC expected its latest pensions “raid” to generate a notional £3 billion. Now high earners are said to be looking to leave their companies’ final salary schemes, potentially leaving the schemes significantly less well-funded hurting lower-paid colleagues.
Meanwhile, the Unite union has sent solicitors’ letters to automotive giant Ford accusing it of providing “misleading” advice to employees who moved from the company to Visteon in May 2000.
Unite says Ford told Visteon UK workers – based at plants in Belfast, Essex and north London – that their accrued pension rights would be “protected”. Visteon UK collapsed last year with the remaining 610 staff losing their jobs and around 3,000 people being they could lose up to 45 per cent of their pension entitlements.
