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.