What’s happening in the pensions dispute?

Today’s statement to the House of Commons by Danny Alexander (the Chief Secretary to the Treasury) – and a previous joint statement by the Unison, Unite and GMB representatives in the local government pension scheme negotiations – indicate that a potential agreement has been reached.

This agreement will have to be approved by each union according to its internal procedures and Unison will be having a Local Government Service Group Executive meeting on 10th January 2012 to discuss the deal that our negotiators have reached.

The “Heads of Agreement” that the union negotiators and the government have arrived at for the Local Government Pension Scheme have both plus points and minus points.

On the plus side, it looks like any consideration of pension contribution increases will be delayed to 2014. Additionally, there are indications that the “Fair Deal” whereby staff who are transferred when a service is contacted out to a private provider can retain their pensions rights will continue.

On the minus side, it looks like the decision about the detrimental shift from RPI to CPI for the uprating of pensions with inflation will be left to the courts – rather than the government conceding on this matter. The courts have already rejected a PCS challenge to the shift to CPI and so, unfortunately, this challenge is therefore not likely to be successful on appeal.

Additionally, there is “in principle” agreement on a shift to a “career average” rather than a final salary scheme. These schemes are normally worse for workers, and so unions have traditionally argued against them. A career average scheme would have to have an accrual rate of about 1/42nd of average salary for each year of service to be equivalent to the 1/60th of final salary pension per year of service that we have at the moment.

And, thirdly, the age at which people can draw their pension is going to go up in line with previous announcements. Workers aged under 50 will thus see an increase in their retirement age.

It is the view of Camden Unison branch officers that the minuses outweigh the pluses in this deal and so we will be urging the Service Group Executive to ballot members or to have a Special Conference on the matter so that members have the opportunity to reject the deal if they wish.

We campaigned against the government’s proposals by saying they amounted to “pay more, work longer, get less”. The outline agreement means we will still be working longer and getting less and, after 2014, we could be paying more too. This lack of significant concessions by the government is why the PCS look like rejecting their offer and why we should do so as well.  The events of 30th November showed how strong we in the trade union movement are when we work together and so it is important that we don’t allow the government to use “divide and rule” tactics and divide local government workers from our brothers and sisters in the civil service or teaching profession.

UPDATE: It appears that a letter from Eric Pickles (Secretary of State for Communities & Local Government) on a limit to employer contributions has meant that there will need to be further talks before the negotiators on the Local Government Pension Scheme are able to present a deal to Unison, Unite and the GMB for individual union’s decisions. Unison negotiators in Health seem to have a firmer agreement and the Health Service Group Executive will be deciding on this on 10th January 2012.

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