UNISON yesterday called on private companies to act responsibly and provide decent pensions for their workers, instead of leaving individuals struggling to make complex, often expensive, individual pensions arrangements.
Responding to a story in the Daily Express yesterday, ‘British pensions are cut in half’, Unison warned that high fees and poor performance mean that many people will be left short of money when they retire, even if they have paid into a private pension.
Two thirds of employers don’t provide a single penny towards their employees’ pensions while awarding themselves gold-plated retirement packages.
After a lifetime of top salaries, boardroom bonuses and perks, many retire on six figure pensions, while their workforce retire with little or nothing.
Phil Wood, Unison Regional Secretary said: ‘Public sector workers save year in, year out for their pensions, but most private sector workers are denied this opportunity.
‘Individuals are faced with very complex pension choices and end up with plans that charge high fees, are inefficient and underperform, leaving them not enough money to live on when they retire.
‘The government should act now to bring an end to this pensions apartheid across the country.
‘Ironically, hardly a week goes by without an attack on the so-called scandal of “gold-plated pensions” enjoyed by public sector workers such as social workers, nursery nurses, teaching assistants, care workers, nurses and paramedics.
‘But the real pensions scandal is how the country will afford to look after the people who have not saved, or not saved enough for their retirement.
‘Private companies have locked hundreds and thousands of workers out of pension schemes. Despite making profits, many are closing their final salary schemes to staff, leaving them with inadequate defined contribution schemes.
‘Some leave their workers with no pension scheme at all. These are the real villains and the government should make sure they do not get away with leaving taxpayers to foot the benefits bill.’
Local government workers pay billions in pension contributions with funds being invested in the stock market.
It takes billions more in contributions and investment returns than it pays out in benefits.
Last year, income from member contributions in England alone increased by 15 per cent – outstripping expenditure by £6 billion.
And the local government employers have said the fund is worth £100 billion and can meet its obligations for the next 20 years, even if no more money goes in.
NHS workers get their pension through a pay as you go scheme.
The scheme is cash rich, with £2 billion more going in last year than was paid out.
The Treasury keeps this money and uses it to top up government spending.
Even if costs do increase, the employers’ contribution is capped at 14 per cent, so it is NHS workers who will pick up the bill.
