EMPLOYEES are to be given more power to control their companies’ pension schemes, the new Secretary of State for Work and Pensions announced yesterday in an effort to calm union anger over the pensions crisis.
Alan Johnson, a former trade union leader, told the TUC that the Government would create powers to ensure that half of pension scheme trustees are nominated by members of the scheme.
He said: “This Government really believes in the value of employee involvement . . . If members are involved in the running of their scheme, it can make them feel that they have a real stake in their pension provision.”
At present pension laws require only that a third of trustees are nominated by members, although some unions have already negotiated schemes in which there is joint representation. Critics believe that if the company nominates a majority of the trustees of a scheme, then it can press them to act in the corporate interest rather than in the interests of the pensioners.
Mr Johnson, who became last week the first former trade union leader to join the Cabinet for 40 years, also reaffirmed to the TUC that people would not be forced to work beyond the current retirement age. He said that ministers “will not raise the state pension age” despite speculation that it could be lifted from 65 to 70.
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Mr Johnson tried to reassure union leaders over pensions after the conference in Brighton heard a series of attacks on the state of pensions.
Derek Simpson, the general secretary of Amicus, moved an emergency motion calling on the Government to give protection to more than 20,000 workers at the Turner and Newall car parts factories.
Their pensions appear to have been lost because of the collapse into administration of the company’s parent, Federal Mogul.
The Government has announced plans for a pensions protection fund, which could cover up to 90 per cent of pension payments for companies that go bust, but it is feared that Turner and Newall employees could miss this because the fund has not yet been established.
Mr Simpson praised the move to make pension trustee boards more accountable. He said: “This is proper power to the people on pensions. It will prevent employers sneakily forcing through changes to benefits and schemes without the consent of the members.”
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Brendan Barber, General Secretary of the TUC, said: “This has been a longstanding union campaign and is another victory for people at work. Fifty-per-cent member trustees will both reassure members that their pension funds are well managed, but could also lead to a new drive by pension funds to hold the companies in which they invest to account.”
Mick Leahy, general secretary of Community, the steel industry union, said that the measure would help to check the behaviour of employers who took pensions holidays and worked against the best interest of their pensioners.
Earlier in the debate on pensions, Kevin Curran, general secretary of the GMB, said that Labour could not stand by and ignore the pensions problems because it had “first implemented the philosophy of cradle-to-grave protection”.
Jack Dromey, deputy general secretary of the Transport and General Workers Union, said that there was “a grotesque contrast” between the pension provision for many workers and those for directors. He said: “Private greed has caused the problem, public need now demands for them to pay up.” The TUC called for compulsory contributions from employers and for the link between the state pension and average earnings to be restored.
ON TODAY’S AGENDA
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MORNING: Debates on regional government and health and safety.
Equal rights, including equality and work-life balance and violence against women.
AFTERNOON: Presentation and debate on migrant workers, after the Morecambe Bay cockle-pickers’ tragedy this year.
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Debates on global trade unions and international development.
Guest speech by Lord Coe, head of the London 2012 Olympic bid.
Flashpoint debate on the European constitution. A number of large unions have already outlined opposition to the constitution because of the Government’s refusal to enshrine greater workers’ rights within it. The TUC leadership is attempting to present a positive perspective because it believes that the constitution would establish better protection for workers than exists at present.
Debate on European enlargement.