TUC calls for pensions compulsion
TUC general secretary Brendan Barber today called for compulsory pensions contributions to plug the gap caused by the move away from occupational pension schemes.
He said stakeholder pensions have failed to fill this gap and warned of an impending pensions crisis unless compulsion is introduced. The evidence showed that when employers contribute, staff do too, he added.
The TUC intends to make compulsion a central demand during its pensions rally in London on June 19th.
Too few workers have pension schemes according to TUC research, which suggests that less than three per cent of workers have taken out a stakeholder pension. Less than half the workforce has access to an occupational pension.
Further, those with a stakeholder pension are not contributing enough to maintain a good standard of living when they retire.
Pensions experts recommend that workers save 15 per cent of their salary towards retirement, yet the TUC calculates the average worker is only saving 4.3 per cent.
The Government introduced stakeholder pensions in an attempt to encourage workers to save in an environment where many employers are closing their final salary and occupation pensions.
Employers with more than five staff are obliged to offer a scheme but are not compelled to make any contribution.
Last week Brendan Barber warned that decent pension arrangements needed to be protected or some employees would consider strike action. He argued that decent pension schemes could be maintained given sufficient will, and suggested that it could be a ‘powerful incentive’ if company leaders had the same pension structure as their employees.
The RMT union voted to take strike action on the railways this afternoon after a dispute over the closure of the final salary scheme to new employees.
