Tuesday 20 July 2010

Pensions onslaught continues - but so does resistance

The onslaught on pensions in the IT & Comms sector continues, with the announcement that the BBC wants to slash pension provision. Their particular wheeze is to break the link to final salary by capping the increase in pay which can be pensionable - this is particularly nasty for younger members and in periods of high inflation.

It's good to see a strong union response, with the five BBC unions (UNITE, NUJ, BECTU, Equity and the Musicians Union) planning to coordinate strike ballots unless the proposals are withdrawn. The recent UNITE IT & Communications National Sector Committee meeting discussed the situation and agreed to send our members at the BBC a message of support.

The government is busy attacking pensions in both public and private sector. The Minister of State for Pensions, Steve Webb MP, announced the intention to change from using the Retail Price Index (RPI) to using the Consumer Price Index (CPI) as the measure of inflation for regulating occupational pensions.

This nasty announcement would affect millions of people - current pensioners, people who were previously in final salary pension schemes and those still contributing. Professional Pensions reports one consultancy estimating that 12 million people would have their pensions reduced.

A Pensions Age report quotes TUC General Secretary Brendan Barber:

"Over someone's whole retirement this will add up to a significant loss. CPI is less than RPI in most years because it excludes housing and council tax costs. But even if all other things are equal CPI is on average half a per cent less than RPI because it is calculated in a different way. If pensions in payment today had been linked to CPI instead of RPI for the last twenty years they would now be 14 per cent lower."

For those whose DB schemes close, and who prematurely become "deferred" pensioners, the impact could be a lot worse.

Everyone should be bombarding their MPs with complaints about this raid on our pensions. We should all be supporting any members in the public or private sector who fight to defend a final salary pension scheme. We should all be joining the Right To Work demonstration against the cuts at the Tory Party conference on 3rd October.

1 comment:

Ian said...

The BBC didn't back down and apparently the ballot is going ahead: