Just back from two days in London looking at our pensions campaign. Useful to get a UK perspective as most of the attacks on our members pensions come from the UK Government.
The big one is the plan to increase pension contributions by 3.2%, grabbing £2.8bn, not for pension funds but for the Treasury. For Scotland this means around £375m being raided from the Scottish Government budget. This includes £140m from local government and further £140m from health. Then we have the indexing switch from RPI to CPI that will take another 15% off benefits. As a member about to retire put it to me today, "you pay into a pension fund all your working life only to have the government steal the benefits at retirement". That's exactly what it is - robbery.
Another interesting pension story today was the publication of PCS's monthly index showing the funding position of all UK private sector defined benefit schemes. This revealed an improvement in fund deficits to £64bn as at February this year from £144bn in February last year. The FTSE100 firms saw their combined scheme deficit also improve from £58bn at the end of February last year to £32bn this year, while the FTSE350 deficit also improved from £68bn to £38bn over the same period. This shows that you need to take a long term view of pension investments and not panic everytime the market takes a dive.
However, PCS have also highlighted "very difficult" times for Defined Benefit schemes - particularly with tax changes expected in April and the recent government proposals on contracting-out, which represent a highly penal tax on DB schemes.
It seems that the Con-Dem coalition is determined to close down quality pension provision, leaving us all in poverty during retirement.