[A-List] UK pensions crisis: trade union section

["Michael Keaney" <michael.keaney@xxxxxx>]

TUC staff face cut in pensions

Kevin Maguire
Friday June 6, 2003
The Guardian

Pensions to TUC staff could be cut after the union movement hierarchy was
forced to pledge its central London headquarters as collateral to plug an
£8m black hole.

Trustees are considering a reduction in the final salary scheme, requiring
employees to work 30 years instead of 25 years to retire on half salary.

The TUC has attacked companies that slash benefits or wind up final salary
pension schemes.

Confidential papers published today in Tribune, the leftwing Labour weekly,
show the TUC fund is £8m below minimum finance requirements following a dip
in the value of investments.

Congress House is worth about £20m, according to the TUC, which transferred
an almost £5m stake to cover part of the shortfall and avoid the pensions
ombudsman taking action over the fund.

The TUC makes a 25% contribution per employee into the fund, one of the
highest in Britain, with employees paying 6%.

The report suggests an increase in TUC contribution payments would not be
economically sustainable. The TUC contribution would have to increase to
approximately 47% to cover the shortfall, it said.

Transferring ownership of Congress House would still mean an 8% jump to 33%
unless financial markets recover, it added.

The TUC said £4.5m of assets had been pledged in a "purely technical
arrangement" and would only be used in the unlikely event of the body
winding itself up.

"The truth is that difficulties caused by the plunging value of the stock
market have been dealt with in a spirit of partnership between the TUC's
governing bodies and its staff," said a TUC statement.