Unions win more power over company pensions

In a fresh concession to union leaders, the Government is to take powers to force companies to give workers greater representation on pension boards.

In a fresh concession to union leaders, the Government is to take powers to force companies to give workers greater representation on pension boards.

Following intense pressure from the TUC, Alan Johnson, the new Work and Pensions Secretary, announced that next year legislation would enable the Government to ensure that at least half of the trustees were employees.

At present only a third of the seats are reserved for workforce representatives - which makes it easier for companies to take pension holidays and reduce benefits. Addressing TUC delegates yesterday, Mr Johnson, who took over from Andrew Smith, pledged that the Government would "empower" people to work as long as they wanted. But the state pension age of 65 would not be increased. "This "Government will not force people to work to 70 years of age," he said.

Mr Johnson said that after six days in his job he had been unable to find "the pouch of fairy dust" to resolve instantly all the challenges being faced, but he would work with unions to address the problems. The assurances followed a resolution passed unanimously by TUC delegates which condemned the Government failing to deal with the pensions "crisis".

Mr Johnson's speech followed a keynote address on Monday by the Prime Minister, who pledged that the Government would honour an agreement on employees' rights thrashed out at Labour's national policy forum in July.

Attending yesterday's debate in Brighton were a group of workers from the engineering company Turner & Newall where management has revealed there is no money to fund its pensions scheme. As a result some workers could lose up to 70 per cent of their retirement income, according to the white- collar and engineering union Amicus. An estimated deficit of £875m has resulted from the insolvency of the US parent company Federal Mogul. Passing an emergency motion delegates pledged their support for the workers who believe they are the victims of the biggest single pensions collapse in British corporate history. Mick Leahy, general secretary of the steel and textiles union Community and a leading pensions campaigner, welcomed Mr Johnson's assurances about trustee boards, but pointed out that taking powers to force employers to comply was not the same as taking a decision to use such powers.

"We are encouraged by the Government's recognition that there should be an equal number of employees and directors on pension boards to ensure that management does not take pension holidays or take decisions to close schemes. However we need a clear timetable for the introduction of the new rules so that both unions and companies can prepare."

A resolution passed by delegates opposed the "work until you drop" approach of Government. The motion expressed particular concern about the closure of schemes which tied retirement payments to the level of salaries, in favour of arrangements which varied according to the performance of stock markets.

Delegates called for new legislation to be introduced compelling employers to make a contribution of 10 per cent of workers' earnings to pension funds. Employees should also make a contribution of 5 per cent of their earnings.

¿ The Chancellor, Gordon Brown, due to address the annual dinner of the TUC's ruling general council last night, was at the bedside of his 86-year-old mother, who is seriously ill in hospital. She was admitted to Aberdeen Royal Infirmary on Friday. Mr Brown's speech was delivered by Ian McCartney, Labour Party chairman.