The assault on pensions
WORKERS, MAY 2007 ISSUE
The recent unmasking of Brown and his part in the pensions attack is welcome. But his removal of advance corporation tax in 1997 has not been the only reason for the pensions problems. For example, no mention has been made in the popular press of the inflated actuarial assumptions that have been applied since the late 1990s to measure pensions liabilities.
The very low long-term interest rate assumptions applied have inevitably produced very high market-related actuarial deficits. These figures in turn have then been splattered across the media in the hope that such "shock and awe" hyperbole would cow working people into giving up final salary schemes.
Make no mistake, this has been a coordinated attack by the government, the employers and the EU, using phoney figures to allow our pension funds to be plundered.
Another aspect overlooked during the recent Brown furore has been the past bleating that has made out that our pension problems are the result of people living longer. WORKERS has consistently maintained that mortality data showing people to be living on average a couple of years longer are not the cause of the pension problems so often portrayed in the media. Of course, if you include the employer "pension contribution holidays" that took place from the mid 1980s to the mid 1990s you get the complete picture of how this grand pensions larceny has occurred.
The response from working people must now be along the collective bargaining route: re-open final salary schemes to new employees and drop the proposal for retirement at age 68.
Our pension bargaining will need to be taken alongside our wage negotiations. Plenty of work, then, for our defensive trade unions to get their teeth into.