Britain’s largest union, Unite urged the government to rule out allowing companies to switch pension increases from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) without pension scheme members’ consent today (Monday 20 February).
The proposal floated in a government green paper on defined pension schemes, led to Unite warning that such a move could effectively equate to the legalised theft of pensioner incomes.
Commenting Unite general secretary Len McCluskey said: “The government is right to say that defined benefit pension schemes are still affordable for employers and that the vast majority of them can clear their pension deficits if they want to.
“But words alone will not stop multi-billion pound companies seeking to duck their pension promises and close pension schemes in an opportunistic way. More and more we are seeing highly successful companies pleading poverty in a bid to shirk their pension responsibilities, while paying ever increasing sums in shareholder dividends.
“Giving companies the green light to arbitrarily switch the up rating of pension payments from the Retail Prices Index (RPI) to Consumer Prices Index (CPI) without consent could effectively equate to legalised pension theft.
“We would urge the government to rule out this measure which could result in some employers exploiting the switch to boost profits and see pensioners thousands of pounds out of pocket in hard earned retirement income.”
Currently, around 11 million pension scheme members in the UK will rely on a defined benefit scheme for all or part of their retirement income. Defined benefit pensions hold around £1.5 trillion of assets.
For further information please contact Unite head of media and campaigns Alex Flynn on 020 3371 2066 or 07967 665869.
Notes to editors
Unite is Britain and Ireland’s largest trade union with over 1.4 million members working across all sectors of the economy. The general secretary is Len McCluskey.