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 This has now been withdrawn and a new letter issued without this reference.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

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