Labour Research August 2002

News

Unions respond to pensions threat

Both the ISTC community union and UNISON public service union have had to take industrial action in an attempt to defend their members' pension rights.

The ISTC was responding to a decision by the Caparo steel group to close its final salary scheme to existing employees from 28 June and introduce a stakeholder scheme in its place. Overtime bans at Caparo sites in Scunthorpe and Tredegar were stepped up to a ''work-to-rule" on 10 July.

ISTC general secretary Michael Leahy said: ''Our members at Caparo feel that they have no alternative but to escalate their industrial action - the first of any kind that they have ever taken - in defence of their right to the security in retirement they were promised when they entered their final salary scheme."

Caparo agreed to talks and the ISTC agreed to suspend the action while its actuaries met those of the Caparo scheme to discuss the viability of the final salary scheme.

UNISON members at Westminster council took strike action at the end of June in protest at the impact on staff pensions of proposals to transfer thousands of staff to contractor Vertex. UNISON is angry that the council has refused to negotiate an admission agreement that would allow those moving to Vertex to remain in the local government pension scheme.

Meanwhile unions generally reacted with dismay to some of the proposals in the government-commissioned Pickering report, A simpler way to better pensions.

Pensions consultant Roy Pickering was charged with reviewing the UK pensions system and coming up with proposals for a simpler structure. However, much of the union focus has been on his proposals to end the legal requirements on survivors' benefits and inflation protection.

TUC deputy general secretary Brendan Barber said: ''we doubt whether these changes will encourage new schemes to be set up or stop employers retreating from current schemes." However, he was more positive about having ''member trustees in all schemes; a more powerful and smarter regulator; and automatic membership in schemes where the employer contributes at least 4%."