Government closes final salary pension scheme for race workers

The
Home Office is closing a final salary pension scheme for staff at the Racial
Equality Council (REC), just weeks after announcing a package of measures aimed
at boosting confidence in pensions.

A
Labour MP said the move would “seriously disadvantage” staff of the REC and
could be seen as a green light for other employers to do the same.

Paul
Stinchcombe, MP for Wellingborough, called on home secretary David Blunkett to
reconsider terminating the national scheme for the REC.

The
pension scheme, which has 377 members, is run by the Home Office-funded
Commission for Racial Equality.

It
closed its doors to new members in 1999 in response to rising costs. Now the
CRE and the Home Office are proposing to junk the scheme, so that even existing
employees will no longer be able to contribute to it.

Instead
of carrying on paying into a scheme which guarantees a level of pension
benefits linked to their salary, employees will almost certainly have to pay
future contributions into a money purchase scheme offering no such guarantees.

"I
feel as though I’ve been kicked in the teeth. A ‘contract’ with my future has
been unceremoniously breached,” said Paul Crofts, chief executive of
Northamptonshire REC.

"You
read about these things in respect of the private sector, but I never expected
a government-funded scheme would be doing this to a relatively small number of
people."

Glyn
Jenkins, senior pensions officer at trade union Unison, said: “This is
[effectively] a pay cut that may mean people working for the REC in future will
be living in poverty and will be reliant on the state when they retire.”

By Quentin Reade

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