LGPS 2014 ballot - Vote YES to protect your future (& ignore the miserablists)

From UNISON eFocus today. There will be a ballot on the new proposed Local Government Pension Scheme 2014.

UNISON members who work for my employer and in my branch have voted overwhelmingly in favour of accepting the deal. This will keep a world class guaranteed pensions scheme for all and stop the discrimination of low paid women in favour of highly paid senior management and Chief Executives.

The ballot will start on 31 July and last until 24 August. You can also vote on-line.

While there are some who have genuine reservations about the proposal, there is also a miserablist opposition who are simply mischief making and doing all they can to distort and undermine the new scheme.

Through our arguments, campaigning and collective action we have defended the LGPS and retained a world class guaranteed defined benefit pension scheme. 

Some people simply don't know how to quit when they are ahead!

Goodbye and thanks Keith: Hello and welcome Frances

On Wednesday evening after the NEC meetings I went to a reception to mark the retirement of UNISON Deputy General Secretary Keith Sonnet. Keith has served the Labour Movement for 40 years and I think we all wish him well in the retirement. Even though I doubt very much we have seen the last of him.

I had a later meeting that I couldn't get out of, so I was only able to have a brief chat and handshake. I don't know Keith that well but it was really nice that he remembered that I had helped (in a very small way) during the Local Government Pension Scheme (LGPS) negotiations in 2008. We also discussed the new LGPS 2014 scheme and the incredibily good deal that UNISON had negotiated for members.

Coincidentally this week Frances O'Grady was appointed as General Secretary of the British Trade Union Congress. She happens to be the first female GS of the TUC which is I think an important landmark occasion in trade union history. I have seen Frances speak and promote progressive labour politics and really welcome her election.

"Merging London's Pensions: the Pros and Cons"

Last week I went to a meeting organised by the Centre of London (Demos) in City Hall to debate whether merging the 34 different Local Government Pension Scheme (LGPS) Funds in London made any sense or not.

"It has been argued that London's pension funds could be pooled, and that significant savings could be made from the current £30m cost of administering the 34 funds across London.

A pooled pension fund could then contribute to new infrastructure projects in London.

The event will be chaired by Liz Meek, Chair of Centre for London with speakers Bob Neill, Parliamentary Under-Secretary of State at DCLG, Suhail Rahuja, Chairman of Superannuation Committee for Westminster, and Ravi Govindia, Leader of Wandsworth Council. Dr David Blake, of the Cass Business School, will outline research from the Toronto Institute and on Dutch public sector funds to provide some comparisons".

LGPS minister, Bob Neil MP, could not come so his place was taken by DCLG civil servant, Terry Crossley (who is due to retire in the next week or so).

I thought that Dr Blake did demonstrate that there was a financial benefit from having better governance (by bigger schemes) although I have heard elsewhere that this is not proven. But it does make sense that bigger schemes would be able to afford more expert and specialist advice and get significant economies of scale .

While Councillor Ravi Govindia from Wandsworth spent most of his time attacking the idea that merger would fund new infrastructure projects rather than the concept of merger itself. Yet he did point out that his fund was well run and efficient so he could not see how merger would benefit his scheme and his council tax payers.

Terry Crossley gave the classic British Civil service "yes, but no, but" analysis (I will miss him when he retires) that there could be savings from merger but there could be other ways of reducing costs.

Councillor Suhail Rahuja gave a pretty convincing argument that we need to research further since "to misquote The Hitchhiker's Guide to the Galaxy", the answer to the meaning of life in the LGPS is not 34.  There is no good reason for there being 34 schemes in London. Why not 17 or 7? If people think that small pensions schemes are better then why isn't the massive USS or BT schemes being pressed to be broken up into smaller regional funds?

I did ask a question to the panel why there was no beneficiary representation speaking at this meeting? After all it is workers deferred pay we are talking about?  Which I think was accepted by most of the panel.

Controversial figure Michael Johnson waded into the debate by accusing the financial services industry and vested interests of completely ripping off the LGPS. I don't think this increased his chances of an invite to Terry's retirement party!

Pensions Week reported on the seminar and concluded that merger was "broadly rejected" in favour of some form of shared services. Which I don't think actually happened. I think the consensus was that it was too early to tell and we need more digging.

With hindsight the panel should have not only included beneficiary representation but also a Pension Committee Chair in favour from a London Labour Council. Most Councils in London are Labour Controlled. The idea mooted of pooled infrastructure fund was also a mistake. Even if it makes perfect investment sense it proved divisive with some rather over excited individuals privately attacking the idea as some sort of "socialist plot".

I think we need to look at this merger idea further. Perhaps we don't need to do it, perhaps we do. While merger will be fraught with difficulties, if it saves money and improves investment performance while improving governance. It is worth looking at and considering carefully.

I have seen figures that claim merger of the national LGPS would save £300 million per year.  If this is true then in these times of austerity then these claims should be looked into.

At the end of the meeting Terry Crossley told me that there use to 3,000 different UK Local Authority pension funds. Now there is 101. So there must have been compelling reasons for this huge rationalisation and it proves that merger difficulties must have been overcome.  

More Key Facts about the LGPS 2014 (and Too Hot Ta Trot)

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More key facts from UNISON about the the new proposed Local Government Pension scheme (LGPS 2014).

• 90% of members willpay the same or less contributions as now

All pensionable service before 1 April 2014will retain a Normal Pension Age of 65

• Most part-time workers and those with actual pensionable earnings between £15,801 and £21,000 will pay less in LGPS 2014
• Over 55% of local government workers work part-time


Only those earning over £43,001 will pay more


They make up just 4% of LGPS members
• 95.6% members earn less than £43,000 - the point at which contributions increase


The LGPS 2014 will for many members deliver a better pension than LGPS 2008, especially for those with less than 20 – 25 years of membership
• But the average length of membership in the scheme is just 7 years, so most members will do better in LGPS 2014

• From 1 April 2014 the Normal Pension Age (NPA) will be at least 65 and will then increase in line with the State Pension Age – which is set to rise to 68 between 2044 and 2046.
• The existing Rule of 85 protections will remain. Members aged 55 or over at 1 April 2012 will be protected by an underpin, which ensures that those people will be no worse off as a result of these changes. Under the proposals there are no plans to remove the pension protection for those made redundant from age 55

• Those who have to work longer will get a bigger pension because they will be paying contributions – and benefitting from employer contributions for longer
• Because all earnings will be pensionable – including non-contractual overtime and additional hours for part-time workers – members will have bigger pensions than now
• Most UNISON members not in the LGPS give cost and low pay as the reason. The "50/50 option" will help them to join

I note that the blogging Miserabilist in Chief, Jon of the Rogers (failed ultra left candidate for London regional convener and General Secretary) has been having a pop at me over this post. Now of course he misrepresents what I have said (I do accept that some non trots do think we could have got a better deal - amazing but true) but since he also makes a series of blatant untruths about the impact of CPI, survivor benefits, the stability of the LGPS, accrual etc etc I would hope by now that very few people paid any attention to his whining and whinging.

He again attacks our staff which is unacceptable especially since as a NEC member he is suppose to be their employer. He also shows his ignorance of the difference between a guaranteed public sector pension scheme and a private sector scheme.

So desperate are they to continue with their calls for general strikes and student union toytown revolutionary politics they want to destroy a perfectly good pension scheme.

The bottom line is he and the other Miserablists support the continuation of a discriminative pension scheme which penalises low paid women workers and benefits senior management and Chief Executive Officers. Nuf said.  (Hat tip Mel for Youtube video)

Moanie fibbing miserabalists and the LGPS 2014

Crikey - I thought that I have seen it all, but there is some really stupid, ignorant, completely self destructive fibs and smears being put out about the proposed new Local Government Pension Scheme (LGPS 2014) by a tiny number of extremists.  Who obviously do not give a damn about the pensions of their members.

  

I can just about accept that there are some UNISON activists who genuinely think we could have delivered loads and loads of strike action that would somehow have improved the bargaining position to get a better deal. I think they are wrong but what we find now is that there are those who seemingly want their members to retire in abject poverty, because that will somehow, further the revolutionary cause? Since they are sending out complete and utter fibs and smears about the new proposals.

What will be their position if the scheme is accepted? When UNISON will be running one of its biggest ever campaigns to encourage members to join the schemes during auto-enrolling? When all members will be by law compulsory placed in a pension scheme? How can they persuade their members to join what will be by any objective intelligent standard, a bloody good scheme, when they have completely rubbished it to them?

I can understand a reasoned debate on the pros and cons of the new scheme but we find extremist branch secretaries, who are personally fully protected themselves, from any of the proposed changes trying to persuade their members that the new guaranteed defined benefit scheme is completely "evil".  By doing so they are doing their very best to destroy a decent pension scheme.

This is shameful. Just because the extremists cannot go on strike, after strike, after strike; they are throwing all their toys out of the pram. While I would hope nobody will pay any attention to such stupidly I have no doubt that some members will and they will leave or not join the pension scheme and then have to endure their old age to die in miserable poverty.  

Members (not Miserablists) to decide on pensions

Today the annual conference for UNISON members who work in Local Government opened in Bournemouth.

I no longer work in Local Government so this year I was not present but I will be down for the UNISON National Delegate Conference on Tuesday as the NEC member for Community.

However, as a long standing member of the Local Government Pension Scheme (LGPS) I was very pleased to hear that the Local Government conference today rejected calls to oppose the new proposed LGPS 2014 and it will now go out to consultation to all members.

Check my post here on "The new LGPS 2014 (and the old Miserablists)".

I did follow some of the debate via twitter on #ulgc12 and #undc12 and apart from the usual silly trolls I was surprised to see how some delegates who lost the vote and therefore disagreed with the democratic decision reacted by attacking their own union for being "cowardly"? Which does make me really wonder why they want to remain a member of an union they publicly attack in such abusive terms? Very strange?

Now the chief miserablists are attacking the union because they disagreed with the Chair of the Conference for not calling a "Card vote" on a motion. Which is different.  I admit that I was not there today but everyone I have contacted about the vote say that the decision by Conference (although close) was clear and a card vote should not have taken place. So I assume it is sour grapes as per usual by the miserablists.

One further point. I note that some of the miserablists, while complaining that they did not win the day, said never mind there was plenty of time to rubbish the new scheme to members before there is a new ballot? 

Hmmm? Do these people actually realise how important pensions are to ordinary working people? I may be wrong but I think that it is probable that the LGPS 2014 will be accepted. Now I think that would be a good decision and it the right of others to disagree. But what these others should be conscious of is that we have already the worse uptake of membership in the LGPS of any of the public sector schemes. Now, you might think that the scheme could be better but if you start rubbishing it and you get one member not join or leave the scheme as a consequence and die in absolute poverty then shame on you.

With pension auto-enrolling later this year and next we have an once in a life time opportunity to organise, recruit and persuade members to join a decent pension scheme. No matter what your views are of LGPS 2014 - don't attack it as a "bad" or "rubbish" scheme.  You think it could be better, which is an entirely different issue. Once this ballot is over (one way or another) we will all have a job of work to do to get our members to remain and join the scheme.

(picture above of some of those who should be deciding the future of the scheme by a secret ballot).

update: Check out UNISONactive take on yesterday

The new LGPS 2014 (and the old Miserablists)

On Wednesday I went to a presentation/Q&A by UNISON to London Region on the proposed new Local Government Pension Scheme 2014. It was on the whole a fairly good humoured and constructive meeting.

I think that the points that struck home with the audience was that 90% of scheme members will pay the same in the new scheme (or less). Only the very high paid will pay more (and they will be gain by higher rate tax relief)

Members within 10 years of retirement will be fully protected (so-called Grandparent Rights).

It will be a fairer, non-discriminatory scheme.  It will improve the build up of benefits for everyone but in particular will mean a better pension for low paid women workers who have average service who will pay less and gain more (70% of our members are women).

There will be a new temporary 50% cut in the cost of staying in the pension scheme (with a corresponding cut in benefits). This will help stop members leaving when they have temporary financial problems. One of my top stewards recently admitted she had to leave the scheme to pay for childcare. Something she had always regretted.

More room for flexible retirement age (still from age 55). I cannot count the number of members I have met who want to "downsize" when they get older and take less stressful roles but cannot under the present scheme since if they if they do so towards the end of their career their final pension will be massively cut.

Workers who depend on non contractual overtime and other earnings will finally be able to protect their full income when they retire.

While the preservation (against huge opposition) and extension of “Fair deal” will protect workers who face or have been out sourced. They will be able to keep their pensions! This is a significant improvement. Which nobody who really cares about the future of working people should put at risk.

The scheme is different and complex but not impossible to understand. There were a number of good questions and points made in the Q&A (even by some of the usual suspects). Yet the miserablists were also present. Barracking, muttering, carping, misrepresenting and scaremongering. Making grossly inaccurate statements and indulging in self important grand standing.

I made the point that as a member of the LGPS for 19 years I was pleased that we now finally have the prospect of a truly long term affordable and sustainable pension scheme. The LGPS 2014 is a world class guaranteed scheme. Which we should now be arguing that all employers, private and public, should either join the scheme if eligible (and many will be) or use as a benchmark to set up a similar scheme to give their workers decent pensions.

To illustrate the value of the scheme I pointed out that where I work those UNISON members who have no access to the LGPS and have to pay into a non guaranteed personal pension scheme would have to save over their career, a saving pot of £300,000 to get a similar £10,000 per year pension. This savings pot would also potentially go up and down due to the vagaries of the stock market. So who knows what you will retire on.

The current average lifelong personal pension saving pot is £32,000. Do the maths.

Everyone is perfectly entitled (and expected) to query and challenge. I can understand those who say that they don't yet understand all what is being proposed yet or even those who genuinely think that we did have the bargaining power to get an even better deal.

I am forced to conclude that the miserablists however don’t give the proverbial about what are the best interests for members. They are driven by their ultra left sectarianism. Nothing would satisfy them. As a longstanding pension activist I can say with certainly that they had no interest whatsoever in pensions before they saw the opportunity to "strike chase" on the backs of ordinary workers. They are extremists who want to hijack the dispute to indulge in their toy town gesture politics.

Ironically it is the Tory right who are spitting the most blood and crying "betrayal" at our deal.
This week I came across, let us say, a "leading opponent" of public sector DB pensions. Who told me that the Government had "surrendered" to the unions. When I told him that there was some opposition to the proposals, he was genuinely shocked and said "don't they really realise how good it is"? I said yes most of them do, but they pretend otherwise.

UNISON has been clear from the beginning that once we have a final offer then it will be put to the members to decide in a secret ballot.

Let us also make clear that LGPS 2014 is potentially a bloody good deal won by our negotiators and our collective action. A perfect deal? No deal is ever perfect but this is really as good as it gets.

But the members should decide.

(Youtube video of leading lights of UNISON united left HotAir guitarists plotting world domination)

"New local government pensions proposals released"

UNISON press release here "The Local Government Association (LGA) and trade unions have today announced the outcome of their negotiations on new LGPS proposals (for England and Wales) to take effect from 1st April 2014.

These proposals will now be communicated to scheme members, employers, funds and other scheme interests. Unions will consult their members over these proposals and the LGA will consult employers. The government has confirmed that a favourable outcome of our consultations will enable them to move directly to a statutory consultation later in the Autumn to implement these proposals.

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.”

ENDS

(I'll post futher once I have read the details but it is looking like a very good deal)

Update: further information from the LGA here

National Association of Pension Funds Local Authority Conference 2012

This was very informative and well organised conference taking place during an absolutely crucial time for the future of the local government pensions scheme (LGPS). I was there as a Councillor and member of the Borough LGPS Investment and Accounts committee.

I did “twitter” (in my case a very apt term?) during the conference (see hash tag @grayee and #napf).
The NAPF had amongst many other speakers the minster responsible for the LGPS, Bob Neill MP, the Deputy Governor of the Bank of England, Charlie Bean; the Chair of the Local Government Association, Sir Merrick Cockell (who in a Q&A I referred to as “Michael”) and from the unions, GMB national secretary Brian Strutton.

The Chair of the NAPF is Joanne Segers. By coincidence the first ever trade union pension course I ever went on was delivered by her father, TUC tutor Terry Segers. Proper old school ex-fire brigade union.

Considering the number of forthright and opinionated individuals present at the conference, the Q&A sessions were quite quiet, which gave a opportunity to a certain gobby part time politician and union rep to somewhat hog the floor during questions.

Key issues to me from the speeches and seminars were:- how Housing associations are “gagging to build new homes” which if happened could help us get out of recession like it did in 1930’s; the real problem in pensions is not in the public sector but that private sector pensions were destroyed by various incompetents; if you truly want diversity on company boards why not have employee reps on them? Are fund advisers really interested in good governance and making company boards accountable? It’s a “no brainer that LGPS should share services" (if so why not just merge?); in the current LGPS if you earn £150k per year you pay less in percentage terms net than if you earn £15k pa (this is wrong, wrong, wrong); What is the collective term for Actuaries? Answer “An invoice”; the new proposed £2 billion infrastructure fund and LGPS governance (a possible national Local Government Pensions Board?)

There was clearly an expectation by speakers that the future of the LGPS negotiations would have been finalised by now. But there is some last minute hic-cups. This is immensely frustrating but I suppose they do want to make sure, as far as possible, that there is no misunderstanding or ambiguities about the “agreement”. The ultra left trade union cry babies (the so called 0.8%ers) are of course still weeping tears at the prospect of no more strike chasing to bring about the revolution but we should have the final offer very soon.

It was good to see at the final session that the conference applauded DCLG pensions lead, Terry Crossley, who is retiring from the civil service. I have crossed swords (politely) with Terry for the past 10 years or so over beneficiary representation on the LGPS. I wish him well in his retirement and told him that if a deal is reached on a new look LGPS then he should have a new part time job and go out and sell the model to the private sector who are in desperate need of affordable and sustainable defined benefit pension schemes. 

"UK Council Pension Funding improves by £37 Billion in one year!" TPA

For some reason or other the Tax Evader's Alliance (which is also known as the Tax Payers Alliance/ TPA) did not use this post's title for their "report" published yesterday about Council Pensions (the LGPS - local government pension scheme) Funding. Instead they continued with their selective scaremongering about so called "New Research" and a "£54 billion "black hole".

The truth of the matter is that funding of Council pensions has improved by a colossal £37 Billion in just over a year. You would have thought that this would be a cause of celebration if you were genuinely concerned with tax payers exposure to pension liability?

Of course the the way that all funded pension funds assets and liabilities (private and public) is calculated is barmy. But that is another story. The fact that they don't appear to know or care shows them up to be the extreme right wing "nasty party" Tory front that they pretend not to be.

So desperate are they to discredit the pensions of cleaners, lollypop ladies and town hall clerks that they compared (the totally unfunded) Police Officer pension contribution rates with the LGPS. What rubbish? The schemes are chalk and cheese. Council pensioners would love to retire with a full pension after 30 years service and many would pay more if they could do so. Maybe they should have titled their report "TPA want all Council workers to retire at 50"!

The real nonsense about the Tax Evaders think tank 4 thickos is that they say nothing at all about the real scandal in British taxation. The individual and corporate tax cheats who cost the UK £70 billion a year (every year - repeat £70 Billion).

Maybe because some TPA directors don't pay any UK tax and some of their funders are serial tax evaders while others simply want to privatise the LGPS so they can rip it off?

Why you should join your company pension scheme NOW! (it's use it or lose it)

It's a no brainer actually (apologies to Homer Simpson whose scan in on right does show he has a brain although it is very small and rarely used e.g tax payers alliance supporter). There are millions and millions of workers in the UK who have access to a pension provided by their employer but they have not joined the scheme.

Sometimes it is because the scheme is pretty rubbish and that there are no real incentives given by the employer to encourage their staff to join. Yet often this is not the case and workers are losing vast amounts of money each year by not joining.

The 25% apparently eligible to join the Local Government Pension Scheme (LGPS) who haven't are losing at least 14% of their wages each year. They also even pay more income tax and national insurance.

However, the real people at risk from not joining their scheme NOW are in defined contribution (aka Group stakeholder or personal pensions) company schemes whose employers pay reasonable contributions if the members also pay something into it. Many of scheme are pretty good. Not as good as say the LGPS but nothing to turn your nose up upon. Decent employers know that any decent pension will cost a lot of money and they have to play their part in providing funding.

The risk ironically to these "decent" schemes is the introduction of pension autro enrolement next year. Enrolement is a "good" thing and will mean that nearly all workers in the UK for the first time will be automatically put into a pension scheme.  What is worrying some employers is that this may mean that the total bill for pensions will rise. If auto enrolling works (and there is some doubt) then instead of 25% of the workforce being in the company pension scheme this may rise to say 50% or more. Potentially doubling the pension payroll.

What many people fear is that some companies (including ones that use to provide non contributory final salary schemes free to all their employees in a more enlightened age) are planning to either slash and burn existing contribution rates or introduce 2nd tier pensions for employees who have not joined the existing scheme. We need to oppose all attempts to reduce contributions. The more in the scheme the more difficult it will be to cut it.

This is a call to arms to all union reps to "encourage" (we cannot give specific individual financial advice) our members to consider joining their scheme.  If they don't, it may not be around much longer. Use it or lose it.

Stopping the LGPS being "ripped off"?

This was posted in UNISONactive last week. "The FT recently published a series of letters on the Local Government Pension Scheme (LGPS) and the pros and cons of fund mergers. Michael Johnson of the Centre for Policy Studies takes stock of the debate and states that potential economies of scale which could be achieved by mergers are 'not in the (pensions) industry’s interests, but very much in the interests of scheme members' and that 'local councils should take the lead and confront the staggeringly inefficient LGPS.'

Comprising 101 separate funds, these should be merged into five regional operations, to facilitate pooled administration and procurement; each would have some £30bn in assets. In time, they would become “expert clients” capable of extracting best value from the financial services industry, and enjoying the other benefits of scaling up': http://www.ft.com/cms/s/0/953c9362-5668-11e1-b548-00144feabdc0.html#axzz1n3UuUI7A (you have to register with the FT to see these reports).

I must admit that I agree that the £150 billion Local Government Pension Scheme (LGPS) is being "ripped off" by the financial services industry (with honourable exceptions) and we need to look at structural change. For example I understand that total commission payments to brokers more than doubled between 2003 and 2007, the result of portfolio turnover tripling over that period.

How to pitch to the Local Government Pension scheme

Last week I was in "Citywire" magazine (see website here) on how pension fund managers and other financial service providers should "pitch" for business to Local Government Pension Scheme (LGPS) committee members. The interview had been arranged by the Association of Member Nominated Trustees (AMNT).  I'm a member of their Executive Committee.

I have endured a number of pension "pitches" and so called "beauty parades" over the years. Some are very good but often they are pretty awful. There are some fund managers who may be good at their jobs but should not be allowed to appear in front of well rounded human beings. They forget that their role is not to dazzle us with their brilliance but to persuade us to buy their services.

I have a general rule in life. If I don't understand something I won't buy it. You can also guess what I will do if I don't like the person trying to sell it. I also want to buy a decent house view on investment principles and not a "star performer" not matter how brightly he or she is burning at the time.

The lack of preparation and research is also striking. If they don't even bother to read and understand our scheme Statement of Investment Principles (SIP) before the pitch then I really wonder why they have turned up and wasted their time and mine? 

When you explain that Pension funds should be long term investors who believe that investments in well managed companies who have good governance practises will tend to produce superior returns you can can see the horror, the horror of the ill prepared and the complacent. Sometimes even the wannabee Masters of the Universe truly have no clothes.  

UNISON Pensions decision: jaw-jaw better than war-war (for now)

In a victory for common sense UNISON elected lay reps have voted to continue with negotiations

over Local Government and NHS pensions.

This morning there was a two hour Pension Summit with 250 senior lay reps present were it was clear that an overwhelming majority of branches, up and down the country, wanted negotiations to continue.  While reserving the right to call further action if these talks break down. Their was near unanimous agreement that there had been a significant improvement in the offer over pensions and that we had a duty to talk not walk.

Next there were separate detailed briefings on the Local Government and NHS pension schemes after which the different Service Group Executive's (SGE)  met and debated on what to do next.  I am really pleased that all the SGE's voted to talk further. 

One sour point in an otherwise positive and constructive day is that it is clear that certain "individuals" outside the union have been telling completely despicable lies about UNISON and trying to interfere in our internal democratic process.  Now while I can respect the opinion of those who genuinely feel that UNISON have made a wrong call.  This is the decision of our democratically elected representatives. What many UNISON reps will not tolerate is unrepresentative, ultra left sects playing out their toy town revolutionary fantasies at our expense. We will not do what we are told to do and think by rule or ruin wreckers and splitters.

Public Pensions dispute: do we talk or walk?

Next week I will be attending a national UNISON briefing on the pensions dispute which will be followed by a meeting of those Service Group Executives (SGE) who have members in the Local Government and NHS pensions schemes.

The SGE’s is made up solely of elected lay members. I sit on the Community & Voluntary SGE and we will be debating and making a decision on whether to support the framework agreement on resolving the pensions dispute. I posted here my initial views on the agreement. Whilst I look forward to the briefing and the debate, the more I think about it, the more convinced I am, that we have to see this through. We need to carry on talking and not walk out of negotiations at this point.

Calling for walkouts is one thing but actually getting people out on strike nowadays is very, very difficult. First and foremost you have to convince members that this strike action is an absolute last resort. When all other attempts and means to negotiate have been exhausted. We were able to demonstrate this was the case for the November 30 strike. Members know that there has been concessions made and will expect us to try our best to put together a deal before being called out again.

We also need to raise our game. The strike on November 30 was a great success but in many ways we punched above our weight. We now know where we were strong and were we were not. We need to build upon our strengths and organise in those areas where we simply don’t have the membership density or steward structure to deliver.


Some unions appear to have rejected talking further and want to plough on with further strike action. If that is their decision then fair enough that is their choice, I for one will not interfere with their internal democratic decision making process. I do wish that others would do the same with UNISON! While I accept that some may argue tactically that the talks will not result in an acceptable offer and instead we should organise more strikes. I do not accept for a moment that to keep “Unity” we must refuse to negotiate until we get an offer that all 27 different trade unions in all their different pension schemes find acceptable. This is just nonsense.

The real threat to “Unity” will come if the unions start arguing amongst themselves with the loud mouths braying their “betrayal politics” mantra. The gains and real improvements that have been already won through the decision to strike and the ballot will be forgotten. Such division would only benefit this Tory led coalition. Pensions is not the only dispute that we are going to have to fight in the next 3 long years.

In my previous post I pointed out that some commentators are in danger of cutting off their nose to spite their face. I also think there is a risk that some in TIGMOO would rather indulge in sectarian infighting and point scoring, rather than carry out the hard work of recruiting members and stewards. Now, I am of course, a well known wallflower, who would not dream of indulging in polemic arguments with anyone.. but I would honestly rather be fighting the Tories and not other trade unionists.

However, I can’t resist this story. I met someone recently who told me how he had been hounded out of one of the ultra left sects because of the “crime of pessimism”. He was formally denounced for raising concerns about its support for a particular industrial dispute. As an experienced trade union activist he was surprised that his concerns were ignored because it did not fit the Party line. He was ordered to either repent his “pessimism” or face expulsion. In this case he didn’t talk he walked and left the sect before he was expelled. Needless to say that dispute ended in yet another glorious defeat...

"Can pension funds shape the future of capitalism?"

Catching up on things. Last month I went straight from the TUC Trustee Pension Conference to the Fair Pension's Guest Lecture at the House of Commons. This was the second presentation I had been to that day on "Capitalism and pensions". I was with a notoriously quiet and reserved UNISON colleague who is a Local Government Pension (LGPS) expert. The lecture was given by Professor Keith Ambachtsheer, Director of the Rotman Institute for Pension Management (left of picture).

He was introduced by John Cruddas MP who is the Chair of the All Party Parliamentary Committee for Responsible Investment. The meeting was Chaired by Catherine Howarth of Fair Pensions.

You can read an account of his speech (and that of Mark Fawcett, Chief Investment Officer at NEST - right of picture) and the full text here. My take on Ambachtsheer is that he believes that Capitalism must be transformed by those who invest in pensions acting as active owners and demanding that capitalism is transformed into a sustainable and wealth creating model. Rather than mainly benefiting "agents" and being subject to their whims.

What I also found striking in his speech was that the traditional argument over pensions about which is best: Defined Benefit or Defined Contribution? Is the wrong question to ask. Instead you should be more concerned with Scale (size of fund), Governance, Investment belief and Fees.  I asked a question about the Local Government Pensions Scheme (LGPS) which has around £140 billion in assets but is split into 101 different funds. Ambachtsheer thought this was just completely wrong to have so many small funds.

Afterwards we went to the St Stephens Tavern where we had some very "interesting" conversations about the future of the LGPS from across the political divide.

TUC Trustee Conference 2011: Saving Capitalism

The presentation was actually called "How funds can benefit from dysfunctional markets - and help save capitalism".  You might enjoy the irony of someone speaking at a  TUC event about saving capitalism - but I couldn't possibly comment.

The speaker Dr Paul Woolley is an interesting bloke. A former stockbroker, fund manager and economist at the IMF. He is now a Senior Fellow at the LSE and set up his own research team there on "Dysfunctional markets". I believe he has funded this on the large amounts of money he made as a fund manager. 

He argues (convincingly in my view) that there needs to be a Revolution to save Capitalism. There are too many "bubbles and crashes" which ends up with fund managers being more wealthy than investors. Vast profits are made by the financial sector and not by shareholders. There is not mild inefficiencies but fundamental problems. Woolley talks about "Principles and Agents". Pension funds and shareholders (Principles) are basically ripped off by our financial services (Agents) who capture "excess profits". Fund managers are paid whether or not they do well. This is a moral hazard and results in bloated... short term-ism and instability. Regulation will not work since the Government is in hock to the financial sector. It is down to us (pension fund trustees and the like) to stop the abuse of our capital. We need to incentivise the UK industrial sector and shrink the financial. Say No to performance fees and No to any alternative investments which rarely delivering superior returns and can be cons. We need total transparency, full disclosure and the monitoring of all charges. Unless this happens it will mean the end of market capitalism. 

In the Q&A I asked him a question that since it would appear that many financial service interests are against us, whether it would be best for large funds such as the Local Government Pension scheme to employ directly their own advisers and fund managers (Australian model)? Paul was broadly supportive. He later finished by telling us that many of the current free market theories are "duds" and future generations will think we are off our rockers for believing in them. 

After the TUC Pension conference I went to a Guest lecture at the House of Commons organised by Fair Pensions by Keith Ambachsteer called "Can Pension Funds Shape the Future of Capitalism? Yes, we can!" Which I will post upon another day.

I also heard Paul speak at the LAPFF conference last month in a presentation called "What Pension Funds should do now" and make similar hard hitting arguments. Since then I have heard the ABI and others make similar arguments about us Principals being ripped off by Agents. I have brought up the issue at two different pension fund trustee meetings. This whole important debate (I sincerely hope) may finally have legs.

TUC Trustee Conference 2011: Auto enrolement

Catch up from last month's TUC Pension Trustee conference "People & Profits".  I went to a useful workshop by the Pensions Regulator on "Auto-enrolment and workplace pensions reform - the role of trustees".

I don't think (in fact I am pretty certain) that many people realise that in a year or so, if they are not in a pension scheme, they will be compulsory enrolled into one. Employees, employers and the government will have to make minimum payments. Employees will have a month to come out. However, many think that due to inertia they will not "opt" out. This is good news on a number of levels. Currently 2/3rd of private sector employees receive no pension contribution whatsoever from their employers. While 50% of workers in the private sector have no pension provision at all. These workers face desperate poverty in their old age and taxpayers will have to pick up the bill for basic social security.

It's not all good news.  The contribution levels are very, very low. 3% employer, 4% employees and 1% tax relief. 8% of your income in pension contributions is no where near enough to get a decent pension.  The old pension adage use to be you that to get a pension of half pay and a lump sum you needed to have the equivalent of 20% of your income invested for 40 years. There are also a number of exemptions. But it is a start. 

There is also a legitimate fear that employers who currently pay more into pension schemes might level down.  Some people opposed the introduction of the national minimum wage for the same reason that it would depress wage rates but this didn't happen. I am more worried that employers who currently only have say 50% of employees in their scheme may cut back on contributions because the total bill will rise if 75% are now in (or introduce a two tier pension scheme for existing and new scheme members).  The Unions need to be wide awake about this risk. 

I also spoke at a recent UNISON Community Service Group Executive meeting and at last week's NEC about the organising opportunity that Auto-enrolment gives us.  The unions must be at the centre of all what is going on.  The greater the density and the organisation we can achieve - the better the final pension deal.

Of course for the public service pensions schemes, if members have to pay 50% more in  contributions (nearly 10% of their income) after years of pay cuts, as well as retire much later and get less, then existing members, never mind the new ones will simply walk.  They will leave the scheme in droves and the schemes will become unsubstainable and collapse. The Local Government Pension Scheme (LGPS) will turn from being cash positive to cash negative in a few years and all Council finances could be completely and utterly shot to pieces.

LAPFF Conference 2011: The Continuing Crisis

Another early start on Thursday to get to the Local Authority Pension Fund Forum (LAPFF) 16th annual conference in Bournemouth from East London for 9am. LAPFF “exists to promote the investment interests of local authority pension funds, and to maximise their influence as shareholders whilst promoting social responsibility and corporate governance at the companies in which they invest....Formed in 1990....combined assets of over £100 billion”.

It is of course quite ironic that this conference took place less than 24 hours after I had been on a (number of) picket lines in the biggest industrial dispute since 1926 over pensions.

Both of the local government pensions schemes I have an “interest” in are members of LAPFF. This year for the first time I was at the conference as a Councillor rather than as a Staff side representative. Which caused some confusion. I’ll try and post on as many of the excellent presentations and debates as possible. If you are a member of a local authority pension committee or panel in any capacity (and any Party or Union) then this is the conference to come to. It is politically non-partisan which in this context I think is very much a good thing.

Tom Watson MP was to be the opening speaker but his mum has fallen ill so he has had to send his apologies. The Chair of LAPFF Cllr Ian Greenwood and PIRC Tom Powdrill instead did a presentation on “The Hacking Scandal: Lessons for Investors”.  

LAPFF have been trying to remove James Murdock (son of Rupert) as Chair of BSkyB not so much with regard to the appalling behaviour of News of the World reporters etc but concern about his independence and the reputational risk to our investments and what this is doing to shareholder value. For example will OFCOM still consider NewsCorp to be a fit and proper shareholder of BSkyB? If they don’t - what impact will this have to Pension fund investments in BSkyB?

Newham Labour Group Statement on Pension Strike Tomorrow

At last night's meeting of Newham Labour Group the following statement was agreed unanimously. 

"We are proud of our Council staff who work extremely hard to deliver the high-quality services that our residents value, despite the savage and unprecedented cuts being imposed by this Tory-led Government.

At the same time, the pensions of Council staff in Newham and across the country are also under attack. Trade union members have a legitimate right to take action in defence of their hard earned pension rights, many of whom are low paid and cannot afford the proposed reform of public sector pensions.

We understand and share the anger felt by Council workers towards the Tory-led government's attack on their pensions and we sympathise with Newham residents who will lose out through the disruption to vital services as a result of strike action against this Tory-led government."

It is already existing Council Policy to oppose the attempt the wreck the local government pension scheme. See here and here.

Picture from the TUC March in March. This was the Newham assembly point outside Stratford Station. East Ham Labour MP Stephen Timms, Newham Labour Mayor Sir Robin Wales and members of the Labour Group, with trade unionists and Party members.