City greed hits workers’ pensions

MILLIONS OF workers expecting pensions on their retirement will be
hit by a crisis in the numerous pension funds. The City of London’s
gilts market has had its lowest yields in half a century and pension
funds are suffering.

Gilts are government bonds and interest is paid on these investments
with supposedly watertight guarantees, so they should give pension funds
a secure basis.

However, since the start of 2006, the FTSE 100 companies’ combined
pension deficit rose by £35 billion to £110 billion due to tumbling
revenue from gilts. Many private company pension schemes were already
seriously underfunded after the bosses took long-term pension holidays –
i.e. opting out of making any contributions – in the 1980s and 1990s.

Companies only increased their contributions by £8 billion in 2004 so
the bosses want a £35 billion increase in contributions to be paid by
workers.

Scottish and Newcastle (S&N) breweries’ bosses have told their
employees that they will have to shell out 6% of their pensionable pay
to stay in their final salary pension scheme – it had been 0% before.
They also want to persuade workers to go onto an inferior career-average
scheme.

The gilts crisis shows that workers cannot rely on private pension
funds. It will probably be an excuse for even more back-tracking by the
capitalist class. The trade unions in both private and public sectors
must organise against this onslaught, starting with the vital ballot for
industrial action by local government workers!