Many More Pension Rights Threatened by New Labour Promise of Legislation to Retrospectively Alter Pension Contracts

The Royal Bank of Scotland pension rules that have so benefited Sir Fred Goodwin do indeed cover many more employees than the former chief executive. RBS pension fund rules applying to those already employed before the reforms of 2006 permit any employee over the age of fifty made redundant to enjoy a full pension that can start to be drawn at once.

'The bank’s Annual Report and Accounts states: ‘The RBS Fund rules allow all members who retire early at the request of their employer to receive a pension based on accrued services with no discount applied for early retirement.’ (quoted in Mail on Sunday).

Some 20,000 of the 170,000 employees of RBS are expected to be made unemployed. The pension rules apply to all levels of staff.

Brown-led attacks upon Goodwin for drawing his pension, and threats to pass legislation to retrospectively alter his pension contract are threats, too, against all qualifying members of the RBS pension fund. If New Labour plans to alter pension contracts and rights retrospectively for this group of eligible workers it bodes ill for the entire class of those with guaranteed pension rights, a very large percentage of whom work in the public sector. Information obtained by the Liberal Democrats last week showed that the New Labour regime has been taking advice on altering the terms of public sector pensions, but we know this too from the behaviour of 'Lord' Mandelson and his threats on pension rights among post office workers, who are not strictly state employees.

This whole scenario is not just about 'unjustified reward' but about huge, unfunded claims for pensions, in the state and quasi-state sector, and unquantified and possibly unmanageable public debt.