The TUC has accused UK employers of underfunding their pensions schemes in the five years to 2002 by taking pensions contribution holidays to the tune of over a billion pounds.
TUC analysis of Inland Revenue statistics relating to pension fund surpluses has found that in the five years to 2002, employers with final salary schemes clawed back some £1.1 billion, either by not paying in anything at all, or by drastically reducing their contributions.
TUC calculations show that since 1997, individual employees have had a much smaller pensions holiday. They have only been able to save £97 million on their pension contributions, but given that employers normally make contributions at double the rate of staff, bosses have clearly not been passing the benefits of scheme surpluses on to their employees.
The TUC also believes that the figures are a conservative estimate of the true picture of employer savings because the Inland Revenue figures do not include those schemes which have been wound up.
In the most recent period for which there are Inland Revenue figures - 1999/2000 and 2000/2001 - employers still saved almost £100 million by slashing or stopping their contributions, the TUC claimed. Employees enjoyed no such pension holidays or contribution reductions during the same period.
TUC General Secretary Brendan Barber said: "Employers were quick to blame stock market failures for the losses which befell their company schemes, yet they forget that in the heady days of the early ‘90s they took pensions holidays worth billions of pounds.
"And, incredibly, even in these difficult times, some firms still believe their schemes are robust enough to withstand a break or reduction in contributions."
But the Confederation of British Industry (CBI) has hit back at the claims with a survey commissioned from pollsters MORI suggesting that companies are now paying millions back into their pension schemes to make good pensions deficits.
The average reported level of provision per company was some £14 million in 2002, £12 million in 2003 and £13 million in 2004.
CBI director general Digby Jones said: "Contrary to popular opinion, companies are responding to the pensions crisis by pouring money into schemes and trying to protect employee benefits. The total in our sample adds up to £1.7bn for 2002 alone. That is a huge contribution to a more secure retirement for UK employees."
However Brendan Barber is convinced that many firms are storing up problems for the future.
"Many employers are closing their final salary schemes because they say they can no longer afford them, yet these figures show that many have surpluses which are effectively allowing bosses to run their schemes for free.
"More often than not, it is the very employers who stopped paying into their schemes a decade ago, who are now closing final salary schemes en masse, denying thousands of workers access to decent pensions."