Bosses save £1bn in unpaid pensions contributions

New
figures out show that despite the current pensions crisis, employers are
continuing to take pensions payment holidays adding up to more than £1bn.

TUC
analysis of Inland Revenue statistics relating to pension fund surpluses has
found that in the five years to 2002, employers with final salary schemes
clawed back £1.1bn, either by not paying in anything at all, or by drastically
reducing their contributions.

TUC
calculations show that since 1997, individual employees have had a much smaller
pensions payment holiday and have only been able to save £97m on their pension
contributions. As employers normally make contributions at double the rate of
staff, bosses have clearly not been passing the benefits of scheme surpluses on
to their employees.

In
the most recent period for which there are Inland Revenue figures -1999-2000
and 2000-2001 – employers still saved almost £100m by slashing or stopping
their contributions. Employees enjoyed no such pension payment holidays or
contribution reductions during the same period.

TUC
general secretary Brendan Barber said: "Employers were quick to blame
stock market failures for the losses which befell their company schemes, yet
they forget that in the heady days of the early 1990s they took pensions
[payment] holidays worth billions. And, incredibly, even in these difficult
times, some firms still believe their schemes are robust enough to withstand a
break or reduction in contributions.

"Many
employers are closing their final salary schemes because they say they can no longer
afford them, yet these figures show that many have surpluses which are
effectively allowing bosses to run their schemes for free."

The
TUC believes the Inland Revenue figures are a conservative estimate of the true
picture of employer savings because they do not include those schemes which
have been wound up.

By Quentin Reade

Comments are closed.