Employees at the head of the trade union movement may have to foot the bill for an embarrassing £8m black hole in their pension fund.
Having poured scorn on retirement benefits available at private-sector companies, leaders of the Trades Union Congress may have to reduce payments to former employees or make them work longer for full pensions.
So parlous is the state of the pension scheme that the TUC has agreed to put up its headquarters, Congress House, as collateral. At present, the employers contribute 19 per cent of an individual's salary, while employees give 6 per cent.
A report obtained by Tribune magazine, marked "private and confidential'', says that to make up the shortfall, a consequence of the slump in the stock market, total contributions would have to rise to about 47 per cent. If Congress House was used as a pension fund asset, the contribution would still have to be about 33 per cent. A contribution of that size would mean "financial disaster'' for the TUC, an insider said.
Among the options being considered by Brendan Barber, the TUC's general secretary, are lower pension payments, obliging staff to work for 30 years rather than 25 years before they receive the full benefit, or ending an arrangement whereby staff retiring early are entitled to a full pension.
The position is particularly embarrassing for Mr Barber and John Monks, his predecessor, because of their campaign to ensure employees' benefits are not undermined by the rise and fall in share prices.
A TUC spokesman said employees were still guaranteed a "very good'' final salary pension scheme. An increasing number of businesses have abandoned such arrangements because of the fall in the stock market. Instead of offering a fixed proportion of final salaries, many companies allow share prices to dictate the size of pensions.Reuse content