The following has been supplied by PCS HQ:
A new report commissioned by PCS highlights why workers in the private and public sector have a shared interest in fighting for better pension provision, and the real divide is between the rich and poor.
The joint report on private sector pension provision on central government contracts written with the University of Greenwich’s privatisation and outsourcing resource centre has considered a number of the world’s largest and richest companies, including IBM, Hewlett Packard and G4S. The provision of pensions to workers in the private sector today demonstrates how serious our work is and demonstrates why PCS is right to call for the development of a strategy across the trade union movement to fight for fair pensions for all.
Pension holidays wrecked schemes. Just over a decade ago nearly half of all private sector workers were in a workplace pension scheme; today it is only a third. In some parts of our own commercial sector of PCS less than 10% of members belong to a pension scheme because of low pay and the fact that the disgracefully poor schemes offered by their employers are often simply not worth joining. One of the key reasons for this is that in the 1990s, according to Inland Revenue figures, corporate Britain saved itself £18 billion through pension holidays, while employees continued to contribute. As the stock market declined many pension funds went into deficit – employers cut pensions rather than repay the monies they avoided. The main reason why companies have dumped decent pension schemes is to give more money to senior management and more profits for their shareholders. Corporate profits have expanded from 13% of GDP in the mid-1970s to 21% today, and executive pay has risen by several times the rate of the average worker.
Huge gulf
As the report demonstrates there is also a huge gulf between the pension of those in the boardroom and those on the shop floor. While pensions have become a thing of the past for many workers, the directors of large companies continue to enjoy very generous pensions averaging £175,000 a year in retirement.
The report sets out why PCS fundamentally rejects a race to the bottom on pensions. It makes the case that the responsibility for the removal of pensions for private sector workers lies with employers and shareholders. Employers failing to pay their share. Despite its claims the evidence indicates that the current government is making the situation worse and not better.
For example, it has been estimated that changing pension indexation from RPI to CPI in the private sector would save employers £100 billion over the lifetime of existing schemes. This is a direct transfer of wealth from employees to shareholders.
