UK trade unions call for FRS17 review
UK – The main trade union body in the UK has called for a review of the pensions accounting standard FRS17.
The Trades Union Congress says FRS17 “can present even previously well-funded schemes as being in serious deficit”. The standard takes a market snapshot of scheme assets and liabilities and is due to be introduced in full in 2005.
The call, which echoes similar complaints from the employers’ body the Confederation of British Industry, is part of a series of pension measures on the agenda at the TUC’s annual conference next week.
The body is up in arms at the closure of final salary schemes. “Congress views the retreat by employers from defined benefits pensions schemes as a determined attack on pay,” it says.
“It considers spurious arguments about tax regime changes and costs often used by employers as pretexts for withdrawing schemes, and calls on the government to introduce a bill to ensure that pensions entitlements are afforded as much protection in law as wages.”
The TUC has also backed workers who have taken strike action over pensions. “Congress welcomes the success in securing through strikes the retention of defined benefits schemes. It commends this action as an example for consideration when unions are confronted with employers intent on withdrawing such schemes.”
The TUC is calling for a minimum compulsory employer contributions to workers’ pension schemes and the introduction of employer pension insurance. Other demands include increased tax incentives for pension schemes and the protection of existing members’ rights to occupational pensions “without abatement at their current contractual retirement age”.
The TUC is also calling for the creation of a legal definition of pensions as “deferred pay”. It is also calling for an acknowledgement of the limitations of stock market investment for achieving long-term pensions saving.
The TUC’s demands come as the CBI, has said the unions are blocking reform of the economy. In June the TUC had to issue denials that its own pension fund was in difficulties, saying that press reports were based on a partial leak.