Controversial pension scheme is not an option

29 January 2014

Despite controversy and uncertainty the Lib Dem minister is trying to push forward a new pensions scheme that could be potentially detrimental to pensioners and their later life income.

The pensions minister, Steve Webb, has said that he back a new collective pension scheme that will allow companies to pool contribution of workers and share the risks and rewards.

This scheme has been proposed in the past and was rejected by the last Labour government due to its controversy and the uncertainty it will cause pensioners.

The scheme, which is one that is used in the Netherlands and in Denmark, works by allowing companies to pool workers contributions and then share the risks and rewards of their investments.

Whilst the scheme promises to increase pensioners salary by 30% to 40% it also means that there is no guarantee of income due to the fact that the income will vary depending on how investments perform. This means that pensioners will suffer as their salary will vary and will be uncertain, which could lead to them struggling to make ends meet at the end of some months.

For years Trade Unions have fought for a guaranteed pensions scheme set at a level that will prevent the fear of pension poverty. To leave pension provision up to a free market that is increasingly deregulated and let the global financial markets determine pension provision for people is not something that the IER supports.

These new scheme will not be one the IER will be supporting but we are working on fighting for a fair pension for workers. If you would like to join us to find solutions to pension poverty, the IER is hosting a conference in London on February 12, at the Unite Building. The conference will address the use of pensions and what we can do to improve the situation.

We urge you to come along as we will be joined by a vast number of experts on the subject who will provide an insight into the situation. We hope to see you there.