By all accounts, the issue is dominating this autumn's salary reviews. Firms are reluctant to accept higher staff costs just as the commercial market, particularly in London, is capsizing. On the other hand, they risk losing key managers – more than one-third of readers in our poll said they would consider quitting if their employer axed its final salary scheme. And what about junior staff? There are already rumblings that, in this climate of industrial unrest, unions may strike for compensation.
Employers are in a fix. Only one in 10 respondents said their firm had followed the example of contractors like Mansell and dropped its final salary scheme. Many of those who haven't are stacking up huge liabilities. One as-yet-unnamed contractor's deficit is reputed to be sufficient to wipe out its net asset value. In the UK as a whole, the level of pension underfunding will exceed £100bn this year; and if new accounting standards force companies to declare their obligations, many – including some in construction – will be in serious trouble.
What can be done? Colin Harding is right to call for a review of the pensions industry (page 33), and industry leaders can add their voices to those imploring greedy Gordon Brown not to repeat his £5bn raid on pension funds by removing pension tax relief for higher rate payers. In the meantime, it's hard to see how firms can justify retaining their final salary scheme, whatever the knock-on effects on salaries. As for the shortfall, they may end up paying insurers to take on their pension obligations. Expensive, yes; but less risky than the current arrangements. And there are more than enough risks in construction as it is.
The secret of Swiss Re
First Big Ben, then NatWest, then Canary Wharf, and now Swiss Re. It's easy to see why London's latest global emblem acquired the "erotic gherkin" moniker, but the finished product will be anything but comical (pages 40-49). It is a truly awe-inspiring piece of architecture. Unfortunately, the public will never see the other great thing about it – the way it has been built. Remember: nothing like this cigar-shaped structure has ever been attempted before. Designers and contractors pulled together, workers rewarded an enlightened approach to welfare with unstinting effort, and an attention to logistical detail resulted in one of the neatest and most efficient sites in the capital.
A hundred weeks into a 150-week programme, Skanska is bang on target. Sometimes, construction can be truly heroic. This is one of those occasions.