It’s corporate directors’ pensions that society can’t afford

It’s wrong to blame public sector workers. Millions have seen their benefits decline. In pressing for an end to current public sector pension schemes, the CBI’s director general, John Cridland, writes: “Pension reforms will also help the prime minister’s ‘big society’ programme to really get off the ground. Public sector pensions remain the biggest barrier to the private and third sectors providing public services” (End this block over pensions, 10 March).

In essence, Cridland gives the game away. However dubious his claims of “a £10bn gap between the amount that public sector employees contribute to their pensions and the value of benefits they are paid or promised”, the real problem for Britain’s biggest employers’ lobby is that surviving final-salary schemes deter companies from swooping for an even greater share of public services.

Even as Cridland calls for “more transparency about the amount of benefits people will get”, he conveniently ignores the fact that public sector pension funds invest billions in FTSE 100 giants, among them arms manufacturers and agents of environmental degradation. Such decisions are all but immune from democratic scrutiny, with union representatives allowed no more than observer status on local authority pension subcommittees.

Cridland writes: “In the private sector … nearly all employers have undergone a painful process of bringing their pension liabilities back under control.” But painful for whom? Undoubtedly, millions of ordinary workers have suffered the closure or dramatic erosion of defined-benefit schemes, yet the same can hardly be said for their top bosses. While nearly two-thirds of private sector workers now lack an occupational

most big corporate directors’ pension pots have grown, even in recession.

A TUC Pensions Watch report highlighted that between 2007 and 2009 the average value of a FTSE-100 director’s total pension shot up from £3m to £3.4m. In 2007 the average annual payout received by a FTSE 100 chief executive was £147,000. By 2009 this had risen to £179,540, a 22% increase, and £70,000 more than the projected pension for Camden council’s chief executive. The champions of the “painful process” have figured prominently among the 1% of the population who have reaped 60% of all pension tax relief, worth some £10bn last year.

Theirs are the pension schemes that society really cannot afford, and these figures reveal the truly grotesque pensions inequality – which the mainstream media largely ignores as it seeks to stoke anger at public sector workers.

Along with thousands of other union members, I shall be joining the TUC’s 26 March demonstration. We shall march for many reasons: in our London borough alone, the threat of 700 redundancies before March 2012, the closure of day resource centres for vulnerable older people, a 65% cut to play services. But we shall also be marching to defend our pensions and oppose Lord Hutton’s call for a 50% hike in our pension contributions as our real pay falls by 4%-5%.

Workers facing pensions below £8,000 a year after a quarter-century’s service are heartily sick of Cridland’s pensions hypocrisy. The coalition’s attack on our pensions could be the moment we say: “We will not take this any more.”

George Binette Camden UNISON Branch Secretary

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