Local Government Pensions: Secret negotiations sell the members short

Details: Friday, 01 June 2012; Written by Unison Socialist Appeal Supporters

Almost four months since the national negotiators struck a secret deal with the employers, UNISON has published a press release containing the “main points” of the proposed Local Government Pension Scheme to be known as LGPS 2014. Despite the fact that the elected Service Group Executive found out the content of the proposals only today reports indicate that it was presented in a series of glossy leaflets and factsheets. The proposals which have been rolled out less than three weeks prior to the Local Government Conference of the union has essentially been cobbled together behind the backs of even the highest elected bodies of the union.

While it may not be possible to initiate a ballot prior to conference, it is most likely that the leadership will seek to sidestep any discussion on motions surrounding the pension negotiations on the grounds that the situation has moved on. The timescale is especially tight given that the deadline for emergency resolutions for conference is Noon on the 8^th June.

Certainly the union leadership will be reluctant to allow a frank discussion at conference about the proposals and the conduct of the dispute. It would be far more convenient for them to go over the heads of the active layers of the union with a flurry of publicity. As one report from the Service Group Executive meeting explained some people present considered that conference was unrepresentative and likely to make the wrong decision.

It is quite likely that the Service Group will either recommend acceptance or duck the question as did the Health SGE, who instead argued that this was the best deal that could be achieved. One thing is for certain, the leadership are desperate to do a deal. Socialist Appeal Supporters believe that we should have a full debate at Local Government Service Group Conference, through the submission of Emergency Motions (which have to come from Branch Committees meeting next week), and demand a clear recommendation is given to members from that meeting, in relation to the ballot

But what exactly are the proposals? Here is the list of the “main points” listed as part of UNISON’s press release:

The main provisions of the proposed LGPS 2014 are:

1 A Career Average Revalued Earnings (CARE) scheme using CPI as the revaluation factor (the current scheme is a final salary scheme).

2 The accrual rate would be 1/49th (the current scheme is 1/60th).

3 There would be no normal scheme pension age, instead each member’s Normal Pension Age (NPA) would be their State Pension Age (the current scheme has an NPA of 65).

4 Average member contributions to the scheme would be 6.5% (same as the current scheme) with the rate determined on actual pay (the current scheme determines part-time contribution rates on full time equivalent pay). While there would be no change to average member contributions, the lowest paid would pay the same or less and the highest paid would pay higher contributions on a more progressive scale after tax relief.

5 Members who have already or are considering opting out of the scheme could instead elect to pay half contributions for half the pension, while still retaining the full value of other benefits. This is known as the 50/50 option (the current scheme has no such flexible option).

6 For current scheme members, benefits for service prior to 1st April are protected, including remaining ‘Rule of 85’ protection. Protected past service continues to be based on final salary and current NPA.

7 Where scheme members are outsourced they will be able to stay in the scheme on first and subsequent transfers (currently this is a choice for the new employer).

All other terms remain as in the current scheme. Future scheme costs will be monitored and controlled to ensure stability and affordability of the LGPS. Further details on cost management and scheme governance will be released once the ongoing discussions in the next part of the LGPS 2014 project are complete.

Heather Wakefield, UNISON National Secretary Local Government, Police and Justice Section said:

“The negotiations over LGPS 2014 have been long and tough and have taken place in a demanding political and economic climate. The process has shown that UNISON, the LGA and the other local government unions can work productively together in the best interests of LGPS members and potential members.

LGPS 2014 is a sustainable, defined benefit scheme, which is designed to protect existing members and be affordable for the low paid and part-time workers who are its majority. Under exacting circumstances, we have achieved the best possible outcome.”

Full details available here - http://www.unison.org.uk/pensions/lgps.asp

Already there has been a lot of criticism of the proposals. Key points that have been identified have been the scrapping of the final salary pension scheme – which is against UNISON conference policy, abandonment of a defined normal pension age – which again breaches union policy.

In addition and of grave concern is the low figure for accrual rates. The Civil Service pension proposal of 1/42 per year on a Career Average pension equated to 1/60^th on a final salary pension scheme. The proposal in the LGPS is 1/49^th which represents a 14.3% reduction. The key point, however, seems to be that negotiators have traded off the accrual rate (1/49^th) against increases in contributions. Thus they will trumpet that there will be no 3% increase (we think), but this is only because at the end of the day we will get a smaller pension.

The wave of opposition will only grow, especially when the “devil in the detail” is revealed. The union leadership will argue that we will be isolated if we oppose the proposals. However, at the time of writing many of the pension disputes are rumbling on. UNISON health workers rejected their deal on a low vote, but now Doctors and other health workers are threatening strike action. Teachers and lecturers, civil servants, are all still in dispute, as are UNISON. Even the police have demonstrated on the streets in opposition to government plans.

As we predicted recently:

The problem for Heather Wakefield and Dave Prentis however is that under the present conditions of austerity and economic instability there is very little room for manoeuvre.

Under current conditions any deal struck between the government and the trade union leaders is likely to be a sorry compromise. It is likely to come under pressure from the City of London and the CBI, from the Tory press and their big business backers who want to see our pensions driven into the ground. On the other hand the deal will fall short of what members want or expect. UNISON Conference: Pensions issue rumbles on and on… May2012

UNISON members should read the detail of these proposals. They represent a further attack on our standards of living and our futures.