Private sector pensions fight

Submitted by Matthew on 11 January, 2012 - 12:53

The ongoing pensions battle in the public sector has now spilt over into the private sector.

The Association of Consulting Actuaries (ACA) has reported that pensions in the private sector face “seismic collapse”. Nine out of ten private sector defined benefit schemes are close to new entrants, and four out of ten schemes do not allow existing staff to build up further benefits. Last week, Shell closed its final salary pension scheme to new workers, despite the pension pot being in surplus and Shell reporting profits over £4.5 billion in the last quarter of 2011.

Unilever is attempting to change workers’ pensions to a less generous career-average scheme. 5,000 of the 7,000 workers employed nationally by Unilever are affected; the changes could see workers pensions reduced by £2,500 a year. Unite, Usdaw and the GMB unions struck on 9 December and have called further strike action on 17 January.

Workers at the Mini car plant in Cowley, Oxfordshire have also threatened to take industrial action against BMW, because of changes to the rights of agency workers and the company seeking to close the final salary pension scheme for new entrants. Changes to the hiring of agency workers will mean that they earn 20% less than workers employed through BMW for doing the same work. In addition, new staff employed by BMW will not be eligible to join the final-salary scheme. BMW profits rose by 66% in the first half of 2011. The factory employs over 3,000 full time staff.

General Electric (GE), the world’s largest aircraft engine manufacturer, announced last year that it was closing its final salary pension scheme for new members, and increasing contributions for the existing workforce from 5% to 9%, Unite has announced that strike action now looks very likely as talks have broken down between the GE and Unite. Ian Waddell, Unite’s national officer for aerospace said: “Doubling contributions for our members is unjustifiable for a global company that made $14.2billion profit last year and awarded its top five executives $10million in salary and $24.5million in pension payments. We will consult our members, but it is now almost inevitable that industrial action will follow.”

The coalition government has been attacking public sector pensions with glee, and claiming that public sector workers get a golden deal compared to workers in the private sector.

Workers should not let the labour movement be split; workers from both the private and public sector should link up their struggles, through local trade councils and rank and file controlled strike committees.

Every worker deserves a decent pension, every attack should be fought, and the labour movement should argue that pensions in the private sector are derisory and need to at a minimum be raised to match public sector pensions, whilst defending existing pensions in the public sector from government attacks and union sell-outs.