Report on Pensions ‘Deal’ from Local Government Service Group Executive

This report of the Thursday 31 May Local Government Service Group Executive meeting is from John McLoughlin, branch secretary in Tower Hamlets and one of our elected representatives from UNISON’s Greater London region on the Service Group Executive.

While the views expressed are John’s, they are very much of a piece with our existing branch policy towards the pensions dispute and the ‘deal’ that has now received the Government’s ‘blessing’ after being submitted for approval by the local authority employers and the recognised trade unions in mid-February. Updates will be posted on the website when available.

Written by John McLoughlin:

I should emphasise that this is my personal report.

 Report from Local Government Service Group Executive (SGE) Thursday 31 May 2012

The key business of the meeting was a briefing on the proposals for the new Local Government Pension Scheme from 1 April 2014, held jointly with members of the Higher Education SGE at 2pm. Executive members were told that details of the new scheme were embargoed until after a press release at 12 noon. We later found that details were posted on the UNISON website that morning whilst we sat in the meeting, including lots of material that can only be interpreted as positively promoting the proposals. There was a debate about how a recommendation should be made.

I moved that as the Service Group Conference is only two weeks away we should approach the Standing Orders Committee to facilitate a debate there so that Conference can make a recommendation in a ballot of members.

There was also a proposal, moved by Glenn Williams from the NW that the Service Group should initiate a consultation process prior to making any recommendation for the ballot. This would be similar to the type of consultation run on pay ballots – with branches determining the method of consultation but using a common template and aggregating votes which would be reported to regional briefing meetings and then meetings of the regional service group executives, prior to a further SGE meeting to make the recommendation and then a ballot.

I was disappointed by the tenor of much of the debate with people suggesting that Conference was unrepresentative and liable to make the wrong decision. It seems to me that if our negotiators are confident that they have managed to achieve not only protecting but improving our pension scheme they ought to be confident of winning that position at Conference.

In the afternoon we had a short briefing. You will no doubt all have seen the proposals on the website but the key elements are:

  • ·        Retirement Age to go up in line with State Pension Age progressively to 68 (and possibly to 71 for those starting work now according to government projections)
  • ·        A Career Average Scheme
  • ·        Accrual Rate 1/49
  • ·        Revaluation rate CPI
  • ·        Based on actual pay – including overtime &additional hours
  • ·        Contributions broadly the same as current but with steep increases for those earning above £43,000 (where the higher rate of tax relief applies)
  • ·        Introduction of a new pay less/get less category of membership where members can opt to pay 50% contributions and earn 50% benefits for a period

People may already have seen a number of examples posted on the website which show the new scheme as better for a majority of members. However this is based on reversing the previous assumptions UNISON has used to forecast the impact of a career average scheme. Previously the calculations have been based on the historical evidence that earnings over long periods grow faster than inflation measured by CPI by more than 2%. They now assume a lower growth of earnings. This is not only a thoroughly defeatist outlook for a Trade Union and counter to the historical evidence. It also has the effect of making the Career Average Scheme look more attractive than it probably is.

If people feel that Conference should have a say in what recommendation should be made the only remedy now will be for branches to submit Emergency Motions. The deadline for Emergency Motions to the Local Government Service Group Conference is 12 noon on Friday 8 June.

In terms of assessing the proposals against our objectives:

  • Work Longer – the proposals fully concede to government proposals to increase pension age in line with State Pension Age
  • Pay More – Our joint strike action on 30 November has led to the government accepting that there is no need to increase contributions overall. But paying contributions for a number of extra years is an increase in what you pay.
  • Get Less – I asked the question today about the value of the proposed accrual and revaluation rates. The first Career Average Scheme was introduced in the Civil Service based on a 1/42 accrual rate with revaluation by CPI. It was agreed that this delivered broadly similar benefits to a 1/60 accrual rate in a final salary scheme. On this basis a 1/49 accrual rate is worth significantly less than our current 1/60 final salary scheme. The impact of a raised retirement age also means that we will get less –because we will have fewer years of pension paid, or if we retire before the new pension age we will get a reduced pension.

That’s why I believe we should still argue for rejection of the proposals.

Back in December we were told that unless we negotiated on the government’s terms we would be isolated. Yet every major union in every other pension scheme has rejected the government’s pensions proposals, including UNISON members in Health. The police have taken to the streets in tens of thousands and now doctors are set to take industrial action for the first time in 40 years over pensions. This is no time to accept the government’s proposals.

One final point on the balloting timetable.

We were told that the formal consultation on the required legislative changes to implement changes to the LGPS would need to start in September and therefore the ballot needs to be concluded by the first week in August.

However as I argued today I think it would be entirely wrong to conduct a ballot on such a key issue at a time when a substantial proportion of our members in schools would have finished for the summer, and many others would also be taking leave.

I am strongly of the view that we should ballot to finish before the school holidays – and this fits entirely with agreeing a recommendation for the ballot at Conference. Should we vote to reject the proposals it would also allow us to approach the other unions who have rejected pensions proposals about further joint strike action in the Autumn.

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