Wednesday, 21 December 2011

Local government pensions update (England and Wales)

A set of principles providing "a positive framework" for negotiations on the future of the local government pension scheme (LGPS) in England and Wales have now been given the green light by government.
The principles and timetable for detailed negotiations were jointly agreed between unions and the Local Government Association after lengthy talks and submitted to the government.

A letter issued by the Secretary of State, Eric Pickles, yesterday contained an unexpected reference to a cap on employers' funding of the scheme, which had not been discussed with unions and has not formed part of the negotiations. This has now been withdrawn and a new letter issued without this reference.

UNISON's service group executives will meet to discuss the proposals at a Pensions Summit on 10 January 2012.

The latest issue of LGPS Campaign News includes the full agreement reached with the Local Government Association (LGA) along with explanatory notes. The government accepted that the LGPS - as a funded scheme with a high proportion of low earners - was different to the other 'pay as you go' schemes and has therefore given the go-ahead for a longer period of negotiation over the short and long-term issues. The government has also agreed to suspend the formal consultation on short-term savings while negotiations take place from January 2012.

This agreement does not apply to the LGPS in Scotland, where there are no current moves to change the scheme. In Northern Ireland the NI Executive has indicated that it is intending to make the same changes as in England and Wales.

There are a number of very important principles for UNISON contained within the framework agreement. These include:

  • Zero contribution increases for most members and no change in contributions, if required, until 2014
  • Maintain the inherent and relative value of the pension to other public sector schemes
  • Prevent opt-out from the scheme and encouraging new members
  • Keep Admitted Body Status
  • Ensure employers maintain the required contribution levels
  • Establish new governance mechanisms at scheme and individual fund levels to ensure good governance and reduce central government intervention
  • Negotiation - rather than imposition - of future changes post 2014 - if any are necessary Improve efficiency through a review of procurement, fund management and administration

Dave Prentis
UNISON general secretary

Friday, 9 December 2011

'Hope for the best but plan for the worst'

"We will hope for the best, but plan for the worst," UNISON's ruling NEC declared today as it assessed the effect of the 30 November pensions strike.

The day of action was "an absolutely fantastic day, the proudest day of my union life," general secretary Dave Prentis told the meeting in London.

And it had a clear effect: already serious negotiations have resumed and will continue into the new year, after ministers withdrew their deadline demanding agreement by the end of this year.

Talks started this week in the main pension schemes - NHS, local government, civil service and teachers' - and are continuing through December and into the new year, and the negotiators are co-ordinating among themselves, while more central negotiations take place with the Treasury and Cabinet Office.

The TUC public service unions will meet on 15 December to assess the day of action and look at the next steps.

But at the same time, the NEC agreed, UNISON needs to build on the momentum of 30 November, keep the union prepared for any further action if necessary, and keep members - especially those who joined in the run-up to the dispute - involved in the campaign.

All the relevant service group executives will meet in early January to be updated on negotiations and plan for any future industrial action.

The NEC called on regions to

  • maintain high active profiles through December and January;
  • call meetings of key activists in service groups to consult on possibilities for further action.


And it urged branches and activists to keep members informed and engaged in discussions to prepare for any offers that might come out of the renewed negotiations and prepared for further, stronger, action if necessary.

Recruitment in the weeks leading up to the strike hit record levels, the NEC heard, with the union recording the highest November recruitment figures in its history.

The meeting also heard a warning of a "major explosions about pay" following Chancellor George Osborne's autumn statement, which included limiting pay increases to 1% following the current pay freeze.

Mr Prentis warned that this would see members' net pay reduced by 20% in real terms from two years ago.

"We've got to gear up this union to deal with pay as we geared up to deal with pensions."

The NEC also:
  • agreed to send a message of support to Unilever workers who have voted for strike action over attacks on their final salary pension scheme;
  • received an update on the campaign to defend the NHS, focussing on the continuing campaign against the government's Health and Social Care Bill, currently going through the House of Lords and urged support for the Big NHS Weekend activity;
  • agreed the union's Link to a document on this siteobjectives and priorities for 2012;
  • agreed financial planning and budgets for the year ahead, including a continued fighting fund, and received the union's accounts for the nine months to September;
  • started planning for the 2012 national delegate conference.

Friday, 18 November 2011

The Great Pension Robbery Explained. Part 1: RPI to CPI











In the June 2010 Budget the Chancellor announced without consultation that the Government will “switch to a system where we up-rate public service pensions in line with consumer prices rather than retail prices”. That is a switch from the Retail Price Index to the Consumer Price Index.CPI and RPI are calculated from the same underlying price data but there are significant differences, notably the following:



  1. Various housing elements included in RPI are excluded from CPI including mortgage interest payments and council tax.

  2. CPI is generally calculated using a geometric mean whereas RPI in contrast is calculated using an arithmetic mean.

  3. In classifying goods and services, CPI follows an international classification system whereas RPI follows its own system.

As a result of these differences, since 1997 (when the 12 month rate of change for CPI was first available), RPI has been on average 0.8% a year higher than CPI. The repercussions for pension scheme members are therefore somewhat obvious, thousands cut from the value of individual public sector pensions at a stroke, without consultation or negotiation.

Thursday, 3 November 2011

How much worse off will you be under the pension proposals?

Pay more, work longer, get less.
Many public service workers are being asked to pay more in pension contributions by an average of over 50%.

You're being asked to work longer, as the retirement age for public service workers is set to increase.

And you'll get less. By using the Consumer Price Index (CPI) instead of the Retail Price Index (RPI) anyone getting their pension could be 8.5% worse off by 2017.

And the extra money isn't being used to improve pension schemes for the future, it's going straight to the Treasury to pay for the bankers' crisis.

Find out how you will be affected.

Pensions calculator

Tuesday, 25 October 2011

Laughing all the way to the bank...

Public service workers are being asked to pay for the bankers' crisis, by an average increase in their pension contributions of more than 50% if they earn above £15,000 full time. This extra money isn't being used to improve the pension schemes for the future – it's going straight to the Treasury to pay for the bankers' crisis.

But why can't the bankers' pay for the crisis out of their own pockets? Is it because their own pensions aren't big enough? InFocus uncovered the facts about some of the pension pots that bankers have to struggle by on during their retirement and compares them to the 'gold-plated' pensions of some of our public service workers.

After all: 'We're all in this together' – right?

Eric Daniels: aged 59
Group chief executive of Lloyds Banking Group.
Worked there from June 2003, retired 28 February 2011.
Pension pot: valued at £5.03 million last December.
Annual pension: £210,000 a year.

Gill Malik: aged 59
Housekeeper in West Suffolk Hospital.
Worked there for 20 years (contracted out for seven years).
Pension if she retires at 60: £1,782 a year.
Pension if she retires at 65: £2,764 a year.

Fred Goodwin: aged 50 at retirement
Chief executive of the Royal Bank of Scotland.
Worked there from 2001 to 2009.
Annual pension: £342,500.
Poor Mr Goodwin had to reduce his pension following public outcry and negotiations with RBS. However, he was entitled to keep an estimated £2.7m tax-free lump sum as well, which would have helped to soften the blow.

Carole Maleham: aged 59
Driver for museums and arts for Rotherham borough council.Employed by council for 26 years (unable to join the pension scheme for many years as she was a part-time worker).
Expected pension: £3,000 a year.

John Varley: aged 54 at retirement
Chief executive of Barclays PLC until 31 Dec 2010.
Worked at Barclays for 28 years.
Pension pot: £18.256 million.
Annual pension: £619,000 a year.

Wednesday, 12 October 2011

The Branch Hardship Fund

A message from our Branch Secretary:

This ballot is probably the most important thing you will ever have to vote on in your working life: not just for you, but for every new employee in the future.

What this Coalition government is aiming to do with your pensions is nothing short of theft and is totally unfair. No other pension scheme outside of the Public Sector is being attacked in this way. Why should we have to Work longer and Pay more to Get less?

I cannot stress how important it is to get a really big yes vote if we are to make the government wake up and listen to us.

Of course everyone will suffer some degree of financial loss by striking. We are all going to lose a day’s pay and everyone will feel the pinch, especially given the current economic climate and our ongoing pay freeze.

If any member feels that they will suffer particular hardship as a consequence of taking a day’s action (maybe because they are already on low pay or receiving a means-tested benefit, have nursery fees to pay or large debts) they can make a claim to the hardship fund. There are no hard and fast rules. In the past we have had few applications, and every one has been successful.

There is a form to fill in. I know it looks rather intimidating but your steward will be more than happy to help you fill it in if you find the form particularly difficult. We will need to see wage slips showing the strike deduction and the one for the previous month. We cannot agree hardship fund applications or give out any money until we have seen these two wage slips. The deductions won’t come out until the December pay run, so we will be considering applications as early as possible in January. We will make payments as quickly as we can.

I can assure you that all claims will be dealt with sensitively and in the strictest confidence. Please Vote YES to protect your Pension!!!!

In solidarity,

Caroline Glendinning
Oxford City UNISON Branch Secretary

Monday, 10 October 2011

Pension cuts: what could they mean to you?


For the latest on what the cuts to the LGPS could mean to you, please see UNISON's latest newsletter (click here).

Also, please click here to sign the e-petition against the change from using RPI to CPI to measure pension uprating. This sees a cut in all our pensions, even for those who have already retired.

Friday, 23 September 2011

The latest news on pensions dispute

It has been announced that the ballot for industrial action over pensions will open on 11th OCTOBER and run through to 3rd NOVEMBER.

The latest regional news on pensions and other issues can be found in the regional newsletter (click here). You may also be interested in information from Channel 4 that shows Hutton is either an idiot or a big fat liar (click here).

Thursday, 22 September 2011

Wednesday, 14 September 2011

Hands off our pensions!

The TUC today unanimously passed a motion supporting strike action in defence of public sector pensions. The motion was proposed by UNISON's General Secretary, Dave Prentis. Read what he said here.

While some other unions took strike action in June this year, UNISON was one of the unions who held back while negotiations continued. We've been patiently waiting for 8 months now. As Dave said this morning, "there comes a time when we say 'enough is enough'".

Here are the key issues to remember when you are called upon to place your cross on the ballot paper in the next few weeks:


  • Our pensions were reduced in 2008 with the abolition of the "85 year rule" which allowed those of us with at least 25 years service to retire at 60 on an unreduced pension.


  • Savings made by that and other changes implemented in 2008 mean our pensions are now sustainable in the long term.


  • This round of pension cuts is purely about taking our money to plug the hole in the economy left by the £multi-billion bail out of the bankers.


  • From April 2011, our pensions have already been drastically reduced (by at least 15%) by simply changing the measure of inflation used when calculating the annual uprating. No one was consulted about this.


  • Those of us in the pension scheme are now being told to pay an additional 3% of our earnings in contributions. This money does not go to the pension scheme - it goes straight to the treasury. It is a tax on pensioners. If you aren't in the scheme, you don't pay it.


  • We are also being asked to work longer (until 67) and receive less at the end, due to a reduction in the accrual rate.

It's time to say "Enough is enough!" HANDS OFF OUR PENSIONS!


Please make sure you receive your ballot paper, by updating your details on-line.


If you have not used this service before, you'll need to register first. Please have your membership number handy. If you don't know your membership number, please ring UNISONdirect on 0845 355 0845.

Tuesday, 16 August 2011

The Great Pensions Robbery

Robert Maxwell was a crook who stole from his employees' pension funds - but he had nothing on George Osborne who, within weeks of becoming Chancellor had raided the future pensions of millions of workers, in the public and private sectors, of billions of pounds. He did this by changing the future basis of uprating our pension benefits from the Retail Price Index (RPI) to the Consumer Price Index (CPI).

This dramatic move had been in the manifesto of neither party to the Coalition of millionaires - indeed it directly contradicted promises made by all three main parties before last year's General Election.

Estimates of the cumulative loss for those of us not yet retired range upwards from 15% (or almost one pound in every six which we had been promised for the rest of our lives).

This is one element of the Government's attack upon pensions which not only applies across the whole public sector but also unites public and private sector workers. It is a move they show no sign of even considering stepping back from.

This is an opportunity to try to use the e-petition site in the interests of working people rather than for reactionary knee jerk populism - the petition is at http://epetitions.direct.gov.uk/petitions/1535.

All trade unionists, and indeed everyone who believes promises should be kept, should sign!

Thursday, 7 July 2011

Councillors speak up for Local Government Pensions

Today, some useful information about the benefits of the Local Government Pension Scheme went up on the intranet. It is a timely reminder of the benefits of joining the scheme. Anyone who is not already in the scheme should seriously consider joining. Apart from the security of a fully-funded final-salary defined benefit pension, membership of the scheme also includes life assurance, effective from the date of joining. 

Although most of us were not very happy with the changes to our scheme in 2008, those changes ensured that the Local Government Pension Scheme would be sustainable long-term.

However, the changes the government are now proposing could put the entire scheme at risk. Even the Tory-controlled Local Government Association can see this is the case and are worried. If our contributions increase by 50% (from 6% to 9% of earnings) many people will drop out, placing the future of the scheme in jeopardy.

At the Full Council Meeting on Monday 11 July, Oxford City Councillors will be debating a motion which defends the Local Government Pension scheme and attacks government plans to increase contributions. Oxford City UNISON thanks the Labour councillors who have agreed to put this motion to the council and hopes councillors of all parties will support this motion. The text is below.

Public Sector Pension contributions increase
(Proposer – Councillor Mike Rowley)
 
Council notes with grave concern the decision of the coalition government announced in the Comprehensive Spending Review (CSR) to impose a 3.2% contribution increase on members of the Local Government Pension Scheme. Scheme average member contributions will increase from 6.6% to 9.8% next year. Additionally the value of all local government employees’ pensions will be reduced on a cumulative basis by the change in the basis of indexation to the Consumer Price Index (CPI)

Council shares the views expressed by the Local Government Association (LGA) in its letter to the Chancellor of February 16th 2011 where it pointed out that this level of increase will inevitably lead to a massive increase in opt-outs from the pension scheme by lower paid employees who form the majority of the local authority workforce.

Wednesday, 16 March 2011

Our pensions under attack!

You may remember, because it wasn't long ago, that the 2008 changes to the Local Government Pension Scheme included scrapping the "85 year rule" and the lump sum and increasing contributions. These changes meant a 14% saving to the Local Government employers and resolved the issue of long-term affordability. However, they are coming for us again...

From next month, our pensions will be uprated in line with the Consumer Prices Index (CPI) measure of inflation, instead of the Retail Prices Index (RPI). The CPI does not include housing costs and so is not an appropriate measure of inflation to apply to anyone who lives in a house. Or flat. Or a tent with ground rent.

This change, which may seem like a minor adjustment, will see our pensions reduced by 15% (according to Hutton).

Also, from April 2012, it is proposed that our contributions increase by a further 3.5% of salary. Prior to 2008, the contribution rate was 6%. Now it is 6.5% for someone earning between £19,000 and £32,000. From April 2012 it would be 9.5%, an increase of 58.33% on the pre-2008 rate.

Hutton also wants us to work still longer. Work longer, pay more, get less.

But the scheme is now affordable in the long term, thanks to the changes in 2008. These changes are not about our pension scheme. The ConDems (with the help of Hutton) want to plunder our pension fund to plug the gap left by the bail out of the banks.

Public sector workers, who are taking responsibility for their retirement by paying into their occupational pension schemes (and thereby reducing reliance on the state in their old age) should not be punished for the bankers' crisis.

Yet another reason to march on the 26th March!

If you haven't already, book your FREE seat on the UNISON coach now by contacting the UNISON office on 01865 252672 or emailing us.

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