Will the unions sit back and let David Cameron amend public sector pension schemes?
The BBC has today announced plans to close its final salary pension scheme to new entrants and also limit pensionable salary increases to no more than 1% a year. This is the first major public sector operation to announce such a move and many believe that David Cameron will use this as a launchpad to attack public sector pensions which have built up massive deficits which UK taxpayers will need to cover.
It is estimated that final salary pension scheme liabilities in the public sector amount to upwards of £1 trillion and the situation could become much worse before it gets better. Unless the UK government is able to attack this particular area of public funding, and either limit pensionable salaries upon retirement or force members to contribute to the scheme, the £1 trillion deficit at the moment could seem like chicken feed in years to come!
There is no way that the UK unions will allow David Cameron to walk all over the UK pension system in the private sector and we can expect significant friction in the short to medium term. Whether the battles between the government and the unions will be on a par the 1980s and Margaret Thatcher's hardline approach remains to be seen but there is no doubt further conflict and further disputes will be announced in due course.
Reader's Digest goes into administration
It has been revealed that the US parent company of the UK version of the Reader's Digest has placed the operation into administration today. This is a matter which we covered some weeks ago in relation to a £125 million pension fund deficit which the US parent company had been trying to resolve with UK pension trustees and the Pensions Regulator. While a deal between the US parent company and...Read More
Majority want end to retirement at 65
A recent survey has shown that over 60% of those in the UK wish to see the government abolish the statutory retirement age of 65. Ironically, the Conservative/Liberal Democrat coalition government had promised to phase out forced retirement but it looks as though David Cameron may have speed up this particular strategy. So why is there a move towards working into later life? As the cost of livi...Read More
Final salary pension schemes under more pressure
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Occupational pension schemes have been a major success
Data released by the Office for National Statistics show that occupational pension schemes have significantly reduced poverty in the UK since the early 1990s. However, there were other interesting statistics issued by the Office today which include the fact that the top 20% of earners in the UK earn four times that of the bottom 20% of earners in the UK. This difference between the rich and the po...Read More
Ministers scrape pension victory
The government has narrowly defeated an opposition amendment proposing to create a "pensions lifeboat" for those struck by failed occupational pension schemes.Ministers defeated the cross-party amendment by 22 votes in the House of Commons after concessions were made to expand the Financial Assistance Scheme (FSA).The FSA will now cover 8,000 more savers, including those whose schemes wound up bet...Read More