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They hope we die before we get old

This article is over 18 years, 7 months old
Bosses are getting away with ditching pension schemes, leaving workers in poverty
Issue 1855

OVER 500 workers marched on Downing Street last weekend to protest against losing their pensions when their company went into receivership. The issue they highlighted already affects tens of thousands of workers and could hit millions more.

Under present laws, when a scheme is wound up, people who have already retired receive their pension in full, but those approaching retirement can lose everything they put in.

Bosses usually escape with all their grossly superior pension benefits intact. The protest was organised by the ASW Sheerness Pensions Group, which has fought for the past year to highlight the injustices workers face when companies go bust.

ASW, formerly Allied Steel and Wire, went into receivership in July. This resulted in two of its final salary pension schemes being wound up at its plants in Cardiff and Sheerness, Kent.

Sheerness protest group chairman Keith Plowman said he had expected to retire on a pension of two thirds of his final salary. But because the company has been wound up he is due ‘around half that and I’m one of the lucky ones. Some people here have lost up to 80 percent of their pensions.’

The ASW action group has identified about 40,000 people whose pensions have been slashed when firms wind up their schemes. This is normally because firms have gone under – but not necessarily. Maersk, the shipping giant, closed its Sea-Land pension scheme last year. Workers saw benefits fall by half. Maersk is a profitable company. The government is proposing to bring in compulsory insurance to protect company pension schemes.

But disgracefully New Labour wants workers to pay the price. Pensions minister Andrew Smith was expected this week to scrap the rule which raises payments in occupational schemes by 5 percent or the rate of inflation, whichever is lower.

If this rule goes then pensions can quickly be eroded by inflation – saving bosses billions. The Amicus union said, ‘This is a very dangerous move. It is just another sop to the Confederation of British Industry.’

Even the TUC, which has done precious little as companies have destroyed occupational pension schemes, said, ‘If inflation rose, pensions would be worth less and that would be unacceptable. Unions might have to think about negotiating higher wages.’ Yes indeed.

  • See the ASW action group website

    Action over pensions robbery

    JOHN HAYTER is a former ASW worker at Sheerness who paid into the pensions scheme for 30 years. He has a disabled wife. He said, ‘Most people think their pensions are secure and separate from their employer, but they’re not. I was relying on my pension. Now we’ll have to sell our home and buy somewhere cheaper. It will be away from the family. I’ve always worked hard and followed the advice of the government and pension experts, and paid into the company scheme which everyone said was the safest and best option to provide a retirement income. Nobody told me this could happen.’

    Some workers’ fury over pensions has boiled over into action. Over 600 workers at the chemical company Rhodia are voting on strikes this week to defend their final salary pension scheme.

    The vote at sites in Widnes, Bristol and Oldbury in the West Midlands is over the company’s decision to end access to the final salary scheme for new workers, and in protest at the company’s management of the scheme for existing staff. Hundreds of RMT union members at the Wiltshire and Dorset bus company have voted by more than nine to one to strike in defence of their final salary pension scheme.

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