Privatised companies 'used assets and cut benefits'

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The Independent Online
NEW employers who took over privatised industries have used millions of pounds worth of pension fund assets and most workers and pensioners are receiving inferior benefits, according to a confidential report sent to the Department of Transport.

Compiled by the National Union of Rail, Maritime and Transport Workers, the report said the union had 'first-hand experience of the adverse effects on pension arrangements of employees of previous privatisations'.

The union is opposing the Government's plans to take over part of British Rail's pension fund assets, estimated to be pounds 8.5bn, and proposing a single, industry-wide pension scheme after privatisation which will protect pensioners' and contributors' benefits. The report says that after the sale of parts of BR's business to the private sector, the new pension schemes, 'without exception' offered inferior benefits. These included NFC (formerly the National Freight Company) Sealink, BREL (formerly British Rail Engineering Limited which has now been taken over by ABB, a Swedish/Swiss engineering firm) and Travellers Fare.

One of the companies used surpluses which had built up above liabilities to take pension contribution holidays for eight years.

Last week, the Commons Social Security Select Committee announced an inquiry into the consequences for pension funds of privatised industries.