A SURVEY from pensions advisers Origen published yesterday shows that companies are continuing to either close their final salary pensions schemes or end admission to all new starters.
Only 35 per cent of companies now have final salary pension schemes, as against the 40 per cent that had them in 2004. Of these 35 per cent, up to half have closed their final salary pensions to new employees.
The position of the bankers and bosses is that final salary pension schemes are completely unviable and that the major shares crashes in recent years have shown that capitalism cannot sustain them and at the same time maintain their super profits.
The Labour government agrees with the bosses and refuses to take action against them to make them honour the final salary pensions into which ‘their’ workers have paid millions, if not billions, of pounds.
Labour also refuses to fully compensate workers for their pensions losses, maintaining that workers will have to either work longer or accept that their living standards will plummet downwards if they stop work and retire.
In fact the government insists that it is going to follow the example of the employers and eradicate the final salary pensions of up to 1.5 million public sector workers. It intends to make them work until they are 65 before they can retire on an ‘average salary pension’, not a final salary pension, based on a percentage of their final salary.
The government pulled back from drawing the sword on public sector pensions just before the general election, because it did not want a major strike on election eve.
Now, however, Blair and Brown are prepared to go full speed ahead to take on the public sector trade unions to smash up public sector pensions.
Government advisers are now predicting that 20 per cent of workers will be working beyond the retirement age by 2020. Already many are postponing retirement indefinitely and one in four say that by the time they retire there will be no state pension.
The government’s pensions expert, the ex-CBI bosses organisation leader Adair Turner, is drawing up a report for the government on the changes that it must make to pensions.
He has already made it clear that as far as the bosses are concerned the problem is that there are too many people and that the working class and the middle class are living too long, far beyond the stage where capitalism could both provide them with decent retirements and keep up the rate of profit.
Adair considers that one of these has to go, and of course it is decent retirements. He says that the solution to the pensions crisis is to either raise the pensionable age to 70, or cut pensions down to an affordable size, or make people pay compulsory extra pensions contributions to the state or private companies, a kind of age tax, to go along with the council tax and following on from the poll tax, or a combination of all three.
The new minister in charge of pensions, Blunkett, says openly that the state will not bail out the elderly as far as their pensions are concerned and that people will have to finance their own pensions, or presumably have a workhouse existence. He prefers a government that bails out the rail privateers and turns its back on the pensioners.
We say that if capitalism can no longer afford the elderly, the solution is to end capitalism and the capitalists. Nationalising the banks, the oil companies and the major industries and pulling out of Iraq would raise more than enough to finance pensions.
In fact, the trade unions have a duty to all workers and pensioners to tell the government that they will not tolerate the offensive on final salary pensions, or raising the pensionable age to 70, and insist on decent pensions for all. They must take action to bring down the Blair government and bring in a workers’ government that will carry out socialist policies.