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?