A wide-ranging new attack on the pensions of millions of private sector workers was unveiled last week – on the basis of a report co-authored by a top trade unionist.
Companies could be allowed to reduce or entirely remove inflation protection for final salary schemes.
At present many workers who get company pensions see them uprated by the inflation rate each year so they maintain their value.
If there were no uprating then the pension would be worth, at present, nearly a fifth less after five years. This would save employers vast amounts but push millions of retired workers into poverty.
The proposals, which could also make it easier for companies to raise the pension age, have been floated by Chris Lewin, former head of pensions at Unilever, and Ed Sweeney, deputy general secretary of the Amicus union.
The ideas come in a consultation paper for the Department for Work and Pensions.
Lewin and Sweeney make it clear they are not yet convinced of any of the proposals they outline. But what is a trade unionist doing agreeing to circulate such threats?
It smacks of acceptance of the central demand from employers that workers must sacrifice their present pensions because some people are living longer.
The report says many people believe “the costs and risks to employers must now be reduced”. This is precisely the contention that should be robustly attacked.
Trade unions have meekly agreed to cuts in pensions on the basis of deficits which are frequently the result of employers taking pensions “holidays” (not paying in contributions) or falls in the stock market that have proved less catastrophic than originally stated.
The Unilever final salary scheme that Lewin used to head closed to new members last week.