By now almost all members will have seen or heard something about the dramatic developments in the dispute over the future of public service workers’ pension schemes over the course of the past week.
In terms of our own local government scheme (the LGPS) the lead negotiators for the three main nationally recognised trade unions, UNISON, the GMB and Unite, signed up on Monday 19 December to a ‘Joint Agreement on Principles and Timetable for Discussion on the Future of the LGPS in England and Wales’. The negotiators from council employers’ body, the Local Government Association, has also signed the document. The following day, while Chief Secretary to the Treasury Danny Alexander was announcing an apparent end to the pensions dispute in the House of Commons, word emerged of a letter in the name of Eric Pickles, the Secretary of State for Communities and Local Government, the individual with ultimate authority within central government for our pension scheme. For a few hours there was widespread media speculation that the framework ‘agreement’ might be on ice as a result of a suggestion in the Pickles’ letter that employers’ contributions to the scheme could be reduced. The furore, however, around the Pickles’ letter proved a tempest in a teapot, and the so-called ‘heads of agreement’ documents are now due to go to UNISON’s relevant service group executives for debate and voting on Tuesday 10 January 2012.
On Wednesday evening I received from UNISON’s national HQ an 11-page explanation of the framework agreement for the LGPS. While making the picture clearer and highlighting some evident improvements, there are still many unanswered questions and I remain convinced that there is no adequate basis on offer for a settlement of the dispute. In my view the framework document will still demand of the vast majority of LGPS members that they work longer, pay more and get less on retirement. Below I explain why:
- Will I be Working Longer? For more than 60% of us in the Camden scheme, who are under 50, the answer is definitely ‘yes’. For those aged 50-54 there is a reference to ‘tapered protection’ without any indication of what that might mean in practice. Only those aged 55 and over are promised retirement on their ‘full’ pension at 65. Otherwise, to avoid significant reductions in pensions payout those aged 35-44 will be working until age 67 and for those under 35 the retirement age will rise to at least 68 as the state retirement age could rise still further
- Will I have to pay more? Apparently not for the first two years up until 1 April 2014, though for workers in the NHS scheme contribution increases would start from next spring. For LGPS members beyond April 2014 there is only an ‘in principle’ commitment to cap employee contribution rates at current levels for the ‘vast majority’.
- Will I get less? Certainly as a result of the switch from the Retail to the Consumer Price Index (from which no LGPS member has protection) most will receive significantly less over the course of their retirement than would previously have been the case. Otherwise, much will hinge on the accrual rate at which your pension builds up over the course of a working life in LGPS membership. The document commits the parties to a rate no worse than the current 1/60th, but there would have to be a significant improvement on that figure to safeguard the level of pension payments.
Members also need to be aware that there is still a demand from the coalition Government to achieve savings of £900 million, but there is no explicit agreement on how that would be achieved. It seems all too safe to assume that any ostensible concessions on contributions will dictate sacrifices by LGPS members in some other respect.
Finally, as I have stated in a recent email to UNISON’s chief negotiator and Head of Local Government, Heather Wakefield, “a climbdown now by the major unions . . . can only embolden the Government to intensify its attacks in other areas, if this is the most ‘militant’ stance that our own and other key union leaderships are prepared to adopt over what was supposed to be an absolute crunch question.”
With all this in mind, I urging members to read and support the statement below calling on UNISON’s Service Group Executives to reject the current proposals, and to support a lobby of their meetings on Tuesday 10 January from 12 noon (to be confirmed) at UNISON’s national HQ at 130 Euston Road, NW1.
Camden UNISON Branch Secretary
Why we say ‘no deal’ on pensions
“These agreements deliver the government’s key objectives in full, and do so with no new money since our November offer. These reforms will save the taxpayer tens of billions of pounds over the next few decades and significantly improve the long-term fiscal sustainability of this country.” Danny Alexander
As UNISON representatives and ordinary members we do not believe that the “Heads Of Agreement” on public sector pensions form the basis for settling our dispute with the government over our future pensions.
The agreements would ultimately deliver the government’s agenda of making public sector workers work longer, pay more and get less in our pensions.
The key elements the government has wanted to impose remain intact:
· Increased Employee Contributions
· A Retirement Age rising in line with the State Pension Age to at least 68
· Replacement of final salary with worse career average schemes
· Pensions devalued by uprating them in line with the Consumer Price Index instead of Retail Price Index, cutting their value by 15%
The agreement is based on the Treasury’s “final offer” issued on 2 November, which allows for negotiation on elements in each pension scheme but within a fixed “cost ceiling”. As Francis Maude has made clear “The cost ceiling has not changed. We have not put an extra penny on the table”.
On 30 November we took part in the largest strike action in at least a generation, in an unprecedented display of unity across public sector unions. Dave Prentis rightly proclaimed it “an incredible success and one of the proudest moments of my career”.
We believe it is a fundamental mistake only a few weeks later to allow the government to now play divide and rule. This can only make it easier for them to push through the cuts in our pensions as part of their wider austerity programme of real pay cuts and massive job losses, making working people pay the price for a crisis created by bankers’ greed. There is too much at stake to allow the Con Dems to pick off unions one at a time or to seek to isolate others as they are clearly attempting to do with the PCS.
We therefore call on UNISON’s Service Group Executives to reject the “Heads of Agreement” and instead call for the resumption of further coordinated public sector strikes to defend decent pensions for all public sector workers.