The voluntary sector could face escalating wage bills after trade union Amicus vowed to claw back the money its members are losing as charities switch from final-salary pension to money-purchase schemes.
Age Concern England and Save the Children have recently announced they are closing their final-salary schemes to new members of staff and Third Sector has learned that another nine major charities are considering making the same switch or even freezing final-salary schemes for existing members of staff.
The TUC last week claimed the change from a final-salary scheme to defined contribution pensions costs represents a pay cut of £40 a week to the average employee.
Chris Ball, voluntary sector secretary of Amicus, which has 30,000 members in the sector, said his union would take action to make sure workers were compensated where organisations "were unnecessarily abandoning schemes
to save money without proper consideration of alternatives.
"We will not sit on our hands if our members are having money stolen from them,
he said. "There will be higher wage claims."
Ball added that Amicus was also investigating whether it could challenge moves to restrict or close final-salary schemes.
Charities claim that higher tax on pension fund investments, poor stock market performance and the new accounting standard FRS17 have made final-salary schemes unsustainable.
But Ball urged them not to panic into switching to money-purchase schemes.
"This is not the only option open to them,
he said. He also advised the sector to recognise the long-term benefits of final-salary schemes: "They are an incentive for people to remain with the organisation. The sector finds it difficult to recruit as it is."