Pension schemes must avoid race to the bottom

As John Hutton revealed plans to remove final salary schemes for public sector workers, UCU warned any rushed plans that create two-tier pension provision will be opposed by its members.
 
The union said it has worked constructively with governments in the past to secure the future of the Teachers' Pension Scheme (TPS) and the Universities Superannuation Scheme (USS). However, it warned pension schemes not to enter into a competition to see who can drive down benefits and increase members' contributions the most on the back of Hutton's 'lamentable' report.
 
The union the Hutton report was wrong to seek to abolish final salary schemes. UCU added it was disingenuous to highlight a minority of high earners to suggest final salary schemes were unfair, as the vast majority of members would be worse off if final salary schemes were scrapped.
 
UCU general secretary, Sally Hunt, said: 'Changes to pension schemes can have no legitimacy without proper consultation with a scheme's members. The lamentable report from John Hutton today must not be used by other schemes to enter a race to the bottom.
 
'The bottom line is that the vast majority of people are better off under a final salary scheme and it is disingenuous to suggest otherwise by highlighting the minority of big earners.
 
'We are currently fighting for a ballot of all members on the USS pension in our universities because we believe the employers' draconian changes will create a two-tier pension system and lead to the end of the final salary scheme. To be clear, we will defend our members' hard-won pensions and we will work with other unions to defend pensions.'
 
More on the USS story can be found at www.ucu.org.uk/defenduss.