TUC: Solving the crisis by Finance News Bulletin

Published: 21/02/07

How the UK tackles the imminent pension crisis is now a major topic of discussion But will anyone have the guts to fix it in 2005 In the second of a two-part sequence, Brendan Barber, representing unions, outlines its priorities for the New YearPensions are in crisis

Millions of populace in work today have no idea now how poor they will be when they retireBut the crisis is hard to pin down as there is no single cause That is why we need a radical novel approach to pensionsTo its praise the government set up the Pensions Commission chaired by Adair Turner, and its first report gives a abstemious assessment of our pensions problems

When the stock market was booming, they took aid holidays But when stock markets fell, pension funds found they had no money for a rainy dayThe result was that many employers cut back on pension schemes novel staff were not allowed to join their aged schemes that salaried benefits to staff in retirement based on their pay when in work

Their replacement schemes do not assurance any level of pension, but depend on asset ups and downsWorse, employer contributions have usually been slash to levels that will not deliver a reasonable pension Even the government's Employers job Group recognised this in their recent accountA reasonable pension has always been part of public sector service conditions, but what is being future is effectively a significant cut in terms and conditions

community sector staff often take home less pay than people doing the same job in the private division, but a reasonable pension has helped compensate Without this the public division will find it harder to employ and retain good staffIt may not be anyone's responsibility, but fewer people now work for the big long established companies that usually provide good pensionsNewer, lesser companies are much less likely to have a good retirement fund

Even the big companies have contracted out jobs that were once in-houseThe cleaners and canteen staff would once have been pensioned direct workers Now they are notThe Conservatives cut back Serps, the condition second pension that would have helped many, chiefly the lower paid

These may help today's pensioners who need it - though a third do not claim what is theirs - but they pretense a real problem for those in workAs the basic condition pension declines in value compared to wages, additional and additional people will depend on income tested benefits when they retireBut this income that it is very hard for people to know whether it is worth saving for departure Who is to know whether their retirement fund pot will simply end up reducing their benefits

Almost everything about their lives hits their pensions They are lower paid, they take minder breaks to mind for children or other dependents and they exist longerWe need a new pensions settlement that can deal with our pensions crisis We require action in four main areas

First we need to add to the condition pension and make sure it increases in line with pay in futureThis would give everybody a secure foundation on which to build and plan their own pension, and raise millions out of means testingSecond, we need force to make sure people at work construct up their own pension with compulsory aid from employers and employees who can afford itFor the low paid this should build up a guaranteed condition second pension, others will save more through work-related or stakeholder type schemes

Third, we should refuse the "work-till-you-drop" policy of increasing the pension age to 70 However, this should not stop us thinking about providing more choice about how and when we retire Why should retirement be an during the night change from full-time work to full-time leisure Some desire to work longer, some want to save more and retire near the beginning

Too many have lost out because they have taken vocation breaks to care for others, have worked part-time on low disburse or have relied on husbands or partners who have empty them or died Pensions is still on the sex equality fuss listThis is an ambitious agenda But it is possible to see some surprising group for even its most radical elements

Those employers who already provide a good pension do not see why others should get away with little or no provisionThe pensions manufacturing cannot tell people whether products are right for them when means difficult looms large for so many There is broad recognition that women have lost outUnions stand ready to play their part by effective people at work that we need to save more now if we are going to have enough to spend when we retire

Others must also now play their partpension reform Women 1 Women 2 Pension rights Divorce Work pensions bump sums Pension Credit Frozen pensions Shortfalls abroad pension Small pensions Tax and pensions Pension repair Made simpleState pension With-profits last salary Money purchase Annuities Serps

Visit original article: