TUs allege double standards in pensions, hit out at CBI

TUs allege double standards in pensions, hit out at CBI

	Published : Thu, 24 Nov 2005 10:05 By : Andrew Stead Print this Story

LONDON: Trade unions in Britain charged that company directors in the country enjoy the luxury of retiring at 60 and still have pension payouts in full. They contended that on an average, such pension payments are 26 times those of most employees.

Brendan Barber, general secretary if Trades Union Congress, said studies have revealed that directors of 100 top companies in the country can get an average 167,000 pounds a year as pension on retirement. On the contrary, a worker draws a pension of 6.344 pounds,

The TUC had carried out studies on 54 of the top 100 companies and it showed that 98 per cent of final salary schemes for executives have a normal retirement age of less than 65 -- just under 80 per cent actually allow retirement at 60 with no loss of pension.

Only one company has a mandatory retirement age of 65 but only for some directors. The research findings also indicated that the majority of the directors could gather funds in their salary schemes twice as quickly as the usual rate for normal workers. This will mean that the directors need to work half as long as workers to get full pension benefits.

In an earlier study, the National Association of Pension Funds had come out with data in 2004 that final salary schemes of only 22 per cent of workers in private sector had a normal retirement age of 60. A majority -- 70 per cent -- had to work on till 65 years of age before they can draw pension.

The Confederation of British Industry had recently criticised prime minister Tony Blair for not raising the retirement age of public sector workers. The TU's reaction comes in the wake of the stand taken by CBI.

John Sunderland, CBI president, in a letter to Blair, said the Prime Minister had set a “poor example to the country” by abandoning plans to raise the public sector retirement age. The letter was co-signed by Justin King, group chief executive of J Sainsbury, and Gordon Campbell, the BNFL chairman.

Barber said the top bosses "can expect to live long retirements on luxury pensions that are far more generous than their employees can expect. They should stop lecturing the rest of us on how we should get smaller pensions from a higher retirement age.”

Paul Kenny, acting general secretary of the GMB general union, said CBI cannot "lecture the rest of us about pay restraint, working until the age of 67 and demanding lower taxation”.

A CBI spokesperson, reacting to the criticism by the TUC, said the CBI had every right to comment on the pension issue as billions of pounds of tax levied on the businesses are spent on pensions.

A committee appointed by the government to look into the pensions issue -- headed by Lord Turner -- is expected to come out with its report shortly. On the basis of the recommendations, the government intends to publish a bill of sweeping pension and welfare reforms next spring.