UNISON STRIKE BALLOT3RD NOVEMBER 2011

Proposed Changes toLocal Government Pension Schemes(LGPS)Steven Lewarne

THIS PRESENTATION

Proposed changes to Local Government Pension Schemes (LGPS)

Public sector pension myths and facts Timetable What you can do about the proposals Questions

PENSION CHANGES

Pay more – up to 50% more contribution Retire later – for some it will be 68 years Receive less – average salary not final salary Lose protection – for privatised jobs

Lower annual increases – CPI inflation measure replaced RPI

PROPOSAL

PROPOSAL

PROPOSAL

PROPOSAL

IMPLEMENTED

PAY MORE

Average contribution of salary will increase by 3.2% from 6.0% to 9.2%

No contribution increase for those earning less than £15,000 per annum

Contribution increase of 1.5% for those earning up to £21,000 per annum

Maximum contribution increase of 6% for high earners

Recent update (7th Oct 2011):http://www.communities.gov.uk/news/newsroom/2004266

RETIRE LATER

Proposal to link the Local Government Pension Scheme (LGPS) to the State Retirement Age (SRA)

Aged between 42 and 57?Retire with pension at 66 years old

Aged between 33 and 42?Retire with pension at 67 years old

Younger than 33?Retire with pension at 68 years old

RECEIVE LESS

An end to final salary schemes Switch to an average salary scheme

Current accrual rate of 1/60th

of final salary for every year worked.For example: A pension of 50% of final salary could be received after 30 years service

Accrual rates could be reduced to 1/90th for every year worked

LOSE PROTECTION

Under current provisions, private sector firms have to establish a ‘broadly comparable’ pension scheme

The proposal includes an end to the ‘Fair Deal’ scheme that protected the pensions of public sector workers outsourced to the private sector under TUPE

LOWER ANNUAL PENSION INCREASE

Annual increases were calculated using the Retail Price Index (RPI) until April 2011

Now calculated using the Consumer Price Index (CPI)

This change will reduce pension benefit values by an estimated 8.5% by 2017

Over the next 15 years thiscould reduce pensionpayments by £84 Billion.

IMPLEMENTED

PUBLIC PENSION MYTHS AND FACTS

“Public Sector PensionsAre Gold-Plated”

The average public sector pensionis £7,800 per annum- Hutton Report (10th March 2011)

http://www.hm-treasury.gov.uk/indepreviw_johnhutton_finalpress.htm

PUBLIC PENSION MYTHS AND FACTS

Public Sector PensionsAre Unsustainable

“Public pensions are affordable” -Public Accounts Committee

Changes made in 2007-08 will reduce scheme costs by £67 Billion over 50 years

http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/pensions-report/

PUBLIC PENSION MYTHS AND FACTS

New Pension Income WillMake Schemes Stronger

All additional revenue will be returned to the Treasury

PUBLIC PENSION MYTHS AND FACTS

People areLiving Longer

Local Government Schemes were revised 3 years ago – costs are now 25% lower

Life expectancy has increased but not by 25%

PUBLIC PENSION MYTHS AND FACTS

“We’re All InThis Together”

These proposals are the equivalent of an average 3% tax on public sector pension scheme members.

PUBLIC PENSION MYTHS AND FACTS

The Proposals HaveWidespread Support

Government Heath Secretary, Andrew Lansley (Conservative MP) described the proposals as ‘inappropriate’ and ‘unrealistic’

http://www.telegraph.co.uk/news/politics/8658168/Andrew-Lansley-attacks-governments-public-sector-pension-reforms.html

TIMETABLE

UNISON ballot opens 11th October, closes 3rd November

Possible strike action on 30th November End of 2011 – discussions on detail of new scheme

completed January 2012 – Ministers’ approval sought for next

steps February 2012 – Parliamentary stages for amending

regulations April 2014 – target date for regulations being laid

setting out new scheme April 2015 – target date for new scheme starting

WHAT CAN YOU DO?

Support UNISON, encourage non-members to join

Vote in the national ballot

Write to your Council Leader, Councillors and MP

FINALLY…..

Pensions are effectively deferred wages. Public sector workers do not generally receive bonuses and therefore the stability of their retirement income is a major employment consideration.Pension changes are effectively an enforced contract change.If these proposals are implemented, will this be the last attack on public sector pensions?

ANY QUESTIONS?