Protecting pensions from the crisis

A lobby of parliament by the National Pensioners Convention last month warned that the pensions’ situation could become much worse in the current economic climate if the government takes no action.

The latest survey by the NAPF pensions fund association reveals that a fifth of existing defined benefit (final salary) occupational pension schemes still open to new employees are considering switching to defined contribution (money purchase) schemes.

And despite the advantages of defined benefit pension schemes, particularly at the present time, public sector pensions (which are mainly defined benefit) have come under renewed attack from what the TUC describes as a “small but increasingly vocal group”. General secretary Brendan Barber accused critics of inconsistency as they attack the government for the decline of quality private sector pensions while simultaneously criticising decent public sector pensions.

The TUC points out that public sector pensions are generally comparable with similar defined benefit schemes in the private sector.

Meanwhile, public services union UNISON has called for protective measures to help pension funds deal with the current crisis, and prevent enforced closure of schemes. It wants member-nominated representatives to be given 50% of seats on pension boards, as promised, and for the local government pension scheme to be reformed to provide the same level of representation.