Company bosses escalated their attacks on workers’ pensions last week as Aon, the world’s biggest insurance broker, announced it would slash its contributions to its final salary scheme in half.
Workers at Aon must now pay in around three times more than they do currently if they want to receive the same value of pension they were promised when they joined the firm.
In effect, this amounts to a big pay cut and marks an escalation of attacks on pensions.
The first wave of employers’ action targeted those who had not yet joined company schemes.
This latest assault hits workers who are already paying in to the scheme.
Pensions experts say that the move by Aon, which employs around 5,000 people in Britain, will encourage other bosses to follow suit.
The Engineering Employers’ Federation agreed, saying, “There is a herd instinct as far as pensions are concerned. If one or two big companies do it, others will do it too.”
Many firms cite poor stock market returns as the key reason why their schemes are in trouble.
However, few if any make mention of the “contributions holidays” they took when share prices were high.
Pension fund trustees are increasingly pessimistic about the future, with a third believing that their schemes will be wound up in the next decade.
So far trade unions have put up only scant resistance to the attacks—and there have been cuts in both public and private sector provision.
With the future of millions of workers threatened by these attacks, surely now is the time to act?