One company that rejoices in its image as a rapacious capitalist firm and another that imagines it embodies the spirit of the labour movement both assaulted their workers’ pensions last week.
Over 25,000 workers at retail group Arcadia, which includes Top Shop, Dorothy Perkins, Wallis and Burton, were told that members of its final salary scheme must increase contributions from 4 percent to 6 percent of their salary and work five years longer to qualify for the same payout.
And once they get a pension it can rise by only 2.5 percent a year, whatever the rate of inflation. Arcadia is owned by Philip Green. He and his family collected dividends of £1.2 billion last year. This is vastly more than the claimed deficit in the Arcadia scheme.
Green, who is said to be worth £6 billion, also owns Bhs. He paid £850 million for the Arcadia group three years ago. Now it is valued at £3 billion. Clearly Green’s huge windfalls are not enough for him.
Meanwhile the Co-operative Group, with 70,000 workers in stores, farming, banks, funeral homes and distribution, announced the end of its final salary scheme.
Instead it wants to put in place an average salary scheme which will deliver a pension worth at least 10 percent less than the present one.
The Co-op does not even claim there is a deficit in its pension funds.
It says it is acting to ensure one does not emerge in future years.
And at Provident Financial workers have been told they have to increase their pension contributions from 7 percent of salary to an extraordinary 14 percent if they are to keep their pension as it is now.
Other companies are rushing to follow the same path, as from April big firms will have to give two months’ notice of major changes to pension funds.
The National Association of Pension Funds reported last week that a survey had found that 43 companies plan to copy Rentokil Initial’s actions before Christmas in closing its final salary scheme to existing members.
In addition 63 companies said they expect to change the terms of their final salary schemes in the next five years.
Some 42 respondents said they would increase the scheme’s pension age, as Arcardia has done.
It is crucial that the unions fight these attacks. The Co-op is heavily unionised, boasts of its “ethical trading policy”, and has many links with the Labour Party and trade unions.
Resistance at the Co-op could roll back the attacks and give an impetus to battles elsewhere.
The unions involved — Usdaw, GMB and the T&G — have all opposed Co-op management’s move but gone no further than promising to consult their members about the possibility of a strike ballot. More robust action is needed.
If a firm said it was cutting wages by 2 percent or (in Provident Financial’s case) 7 percent, or said workers had to work an extra three hours a week more, there would be howls of outrage followed by determined campaigns for action. That’s what we need now.
London-wide rally in support of Pensioners Charter
12.30pm, Thursday 19 January, Camden Centre, Judd Street (back of Camden town hall), London. Nearest tube Kings Cross/St Pancras. Organised by Greater London region of the National Pensioners Convention.