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Pensions

RIGHT TO A DECENT PENSION

In 1978, the government concluded an agreement with workers and pensioners which guaranteed pensioners a decent pension which would not lose its value. In exchange for workers paying higher National Insurance contributions, pensioners were guaranteed that they would receive an annual increase in pensions equal to the average increase in wages or the Retail Price Index, whichever was the higher.

The Tory government of 1979-1997 blatantly betrayed Britain's pensioners and unilaterally abolished the 'link' between the annual wage increase/RPI - yet New Labour which came into office in 1997 has compounded this betrayal by refusing to restore the link, despite repeated promises to do so prior to the election in 1997..

Today in Britain there are 12 million pensioners, many growing old in poverty, unable to buy sufficient food or heat for their homes. Pensioners today are worse off in real terms than they were prior to 1997.

To add insult to injury, the Government and local authorities 'steal' the savings, assets and homes of pensioners who have to face long-term hospitalisation or who go into care. Our Party is committed to stopping this outrage; to take someone's home, their savings and assets simply because they have to go into care is theft, and tramples on the rights of people who during their working lives have already paid for their own health and welfare care.

We want to see a properly funded national contributory pension scheme based on contributions of employers and employees, which will guarantee all workers on retirement with a proper index-linked retirement pension. Contributions to the national fund would be transferable to occupational pension funds (and vice-versa) with no loss of benefit.

The SLP opposes private pensions - a move by New Labour designed to further reduce government expenditure on pension provisions and compel workers to pay into private pension schemes or industry-based money-purchase pension schemes..

With private or money-purchase pension schemes, an individual's pensions contributions are invested in shares, property and other assets designed - so the architects of this scheme tell us - to build up a fund which at the date of retirement can be converted into a regular pension payment.

Occupational pensions were traditionally based on the principle of a final salary scheme. In other words, workers on retirement would receive up to 66 per cent of their final salary plus their state pension for the rest of their lives.

An occupational pension scheme should allow for the payment of 100 per cent of a person's salary at the date of retirement when based on the final salary principle. However, even under the present arrangements a final salary scheme it is infinitely better than a private pension or money-purchase pension scheme - which is based on shares and on investment return over the lifetime of the pension scheme.

To add insult to injury, a private pension or money-purchase scheme will depend on what the annuity rates are at the time of retirement. This is yet another scheme designed to remove central government's responsibility for providing decent pensions to men and women who during their lifetime have paid enough by way of national insurance contributions and tax to be entitled to a pension no less than the best occupational pension currently in existence. It is also a policy which puts billions of pounds into the hands of private insurance companies.

Occupational pension fund monies are deferred pay. No employer or government should be able to take one penny out of an occupational pension fund. Pension fund monies should be used for one purpose and one purpose only - to pay pensions to pensioners and beneficiaries.

The Socialist Labour Party condemns the Pensions Review as a cynical attempt by the Government and employers to gain further control over occupational pension funds. Our Party rejects all the recommendations and proposals which have already been thoroughly discredited.

The trustees of occupational pension schemes should be those who are members, either contributing members or beneficiary (retired) members of the schemes. These trustees should have control over investments which cannot be left to the incompetent (and, in some cases, corrupt) investment policy decisions taken by the so-called 'professionals'.

New Labour, the Tories and Liberal Democrats all support the Government and employers having control of occupational pension funds - including investment policy - and are committed to the introduction of private pension and money-purchase schemes.

New Labour, the Tories and Liberal Democrats all refuse to restore the 'link' for Britain's 12 million pensioners. If the 'contractual' agreement concluded in 1978 was restored, the pension of single pensioners would rise from £82.05 to £118.05, whilst the pension for a couple would increase from £131.20 to £188.10, an increase of 43%. If this policy was implemented in full it would only restore the level of pensions to the level paid in 1979.

Our Party is committed to restoring the 'link', a policy which would cost £8 billion; a sum which could easily be met out of the £12 billion which Britain would save if we withdrew - as we should - from the European Union.