Link to this page: http://www.socialistparty.org.uk/issue/960/26052
BT attack on pension benefits
Clive Walder, CWU member (personal capacity)
For the second time in nine years BT is seeking to attack the pension benefits of its workers. In 2008 the BT unions 'sold' their members a 1% increase in contributions and an increase in the pension age to 65 to protect the long-term interests of BT pensioners.
An expected increase in the deficit by nearly £4 billion was leaked to the press in advance of this year's triennial review of the scheme's finances. It is very likely that this was a deliberate act on behalf of shareholders who are fed up with continually making contributions to reduce the deficit.
One of the reasons BT is claiming this is necessary is that the old final salary scheme is composed of a dwindling number of contributing members and an ever-increasing number of people drawing pensions.
The cost to the pension fund of financing mass redundancies is also a considerable factor in this situation. But BT decided to close this scheme to new entrants in 2001 helping to create this problem!
Pension fund trustees take advantage of workers' lack of understanding of pension finances by using large numbers to frighten them into accepting reduced benefits. The deficit quoted by BT is what it would be if every member drew their lifetime's pensions at once.
This is clearly something that is never going to happen but such propaganda will frighten workers. In fact BT has completely failed to demonstrate it is unable to afford to continue to finance the deficit.
It is encouraging that the Communication Workers' Unon (CWU) has said that it will ballot for industrial action if BT stops further benefit accrual of workers still in the final salary scheme.
The current pensions time bomb demonstrates that capitalism can't guarantee a comfortable retirement. There is an urgent need not just to kick the Tories out of government but also the pension robbers out of the boardrooms and replace them with workers' control of a publicly owned economy which will use the enormous wealth currently enjoyed exclusively by the rich for the benefit of all.
In The Socialist 30 August 2017:
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