Workers pensions in time of Brexit August 16, 2016Posted by WorldbyStorm in Uncategorized.
Nearly 100,000 workers at the Royal Mail and the Post Office are likely to be the victims of turmoil in markets as the companies plan big cuts to their “simply unaffordable” pension schemes.
Currently, Royal Mail pays around £400m a year into its “defined benefit” scheme, which guarantees a pension based on a postal worker’s average salary over his or her lifetime, rather than what happens on the stock market.
And wait for the excuse:
But the company said financial market conditions had deteriorated so much that the cost of keeping the plan fully open would balloon to £900m over the next few years. Although the cuts were first mooted just before the EU referendum, historic lows in bond markets since the vote have made the pensions even less affordable to companies.
The companies argue that the cost of maintaining the pension schemes has become unsustainable, in part because of big increases in longevity but also because of falls in gilt and bond yields, which mean they have to pay in more to keep them financially afloat. These gilt and bond yields have hit historic lows since Brexit, making the pension schemes even more expensive to maintain.
In a way it doesn’t matter whether they’re sincere or simply making excuses about Brexit and its place in this. The fact is that the left is uniquely unprepared to contest and combat these measures, that there is an open goal there for the right. And it will be seen again and again across other areas where workers rights will be whittled away.
None of this is to argue that all would be fine and dandy in the event of Bremain, but that change is change, that if a status quo is disrupted one had better be pretty damn sure that one has the means to combat whatever comes next.