Firms still taking pensions holidays
NEW figures show that despite the current pensions crisis, employers are continuing save billions of pounds by taking pensions holidays.
TUC analysis of Inland Revenue statistics relating to pension fund surpluses found that in the five years to 2002, employers with final-salary pension schemes clawed back some £1.1bn, either by not paying in anything at all, or by drastically reducing their contributions.
TUC calculations show that since 1997, individual employees have had a much smaller pensions holiday. They have been able to save only £97m on their pension contributions, but given that employers normally make contributions at double the rate of staff, bosses have clearly not been passing the benefits of scheme surpluses on to their employees.
In the most recent period for which there are Inland Revenue figures - 1999/2000 and 2000/2001 - employers still saved almost £100m by slashing or stopping their contributions. Employees enjoyed no such pension holidays or contribution reductions during the same period.
TUC General Secretary Brendan Barber said: 'Employers were quick to blame stock market failures for the losses which befell their company schemes, yet they forget that in the heady days of the early '90s they took pensions holidays worth billions of pounds. And, incredibly, even in these difficult times, some firms still believe their schemes are robust enough to withstand a break or reduction in contributions.
'Many employers are closing their final-salary schemes because they say they can no longer afford them, yet these figures show that many have surpluses which are effectively allowing bosses to run their schemes for free. There's also the danger that they may be storing up problems for the future. More often than not, it is the very employers who stopped paying into their schemes a decade ago that are now closing final-salary schemes en masse, denying thousands of workers access to decent pensions.'
The TUC believes that the figures are a conservative estimate of the true picture of employer savings because the Inland Revenue figures do not include those schemes which have been wound up.
