But research by a pension consultancy company shows that nearly half of Britain’s top 100 companies could have cleared their entire pension deficits with the payment of just one year’s dividends that are paid out to their shareholders.
The companies in the FTSE 100 index handed out £69 billion to shareholders, more than five times the £13 billion they made in pension contributions.
Dividend payments go overwhelmingly to people who are already very rich.
Of the 60 companies that say their pension scheme is in deficit, 46 could have cleared their whole shortfall by withholding a year’s dividends.
These included BP and Royal Dutch Shell, the energy groups, GlaxoSmithKline, the pharmaceutical maker, and Unilever, the consumer goods group.
The Pensions Regulator, the toothless government body supposed to watch over the health of pension schemes, has recommended safeguarding schemes by redirecting some dividends. But the JLT Consultancy that produced the research says, “We did not find much evidence of employers adjusting their dividend policies following guidance.”
In fact, instead of securing future pension payments, companies are shutting down the present schemes and replacing them with worse ones.
This means they can keep the money for profits and dividends.
Last week Royal Mail announced it had begun “consulting” workers on the fate of its 90,000-member scheme. In recent months, Tata Steel UK, BMW, Marks & Spencer and US multinational Honeywell have laid out similar plans.
The CWU union that organises Royal Mail workers said that any unagreed pension changes will spark a national strike ballot.
When the bosses and the government come with their sob stories about pensions, unions should not give in to the blackmail.
The money is there to fund decent pensions for all.