Vote YES to Protect Your Pension: LGPS 2014 Ballot

From tomorrow (31 July 2012) UNISON members will be able to vote on the new look Local Government Pension Scheme 2014.

My advice is to ignore the miserablists who are urging rejection for reasons I cannot even begin to understand never mind explain.  This (LGPS 2014) is a good deal.

Since the Union cannot identify who is in the scheme or not, all those who work for employers who have membership of the LGPS will be balloted. If you are currently in the pension scheme you need to vote YES to secure it. If you are not currently in the scheme I would also recommend you vote YES since you may be able to join it later.

Voting YES is a "no-brainer" in my view. This is a good deal that should secure the scheme for the future. Check out the latest advice below from the UNISON pension advisors:-

"It’s time to have your say! Use your vote on the new pensions proposals.

• Ballot will be held 31 July – 24 August.
• Ballot helpline (10-21 August) 0845 355 0845

Among the improvements to the LGPS negotiated by Unison are:

• No overall contribution increase – 90% of members will pay the same or lower contributions than now – you will only pay more if you earn over £43,001 a year.
• A career average scheme which uses all your pensionable pay to calculate your pension, increase in line with the Consumer Prices Index (CPI)
• An improved 1/49th accrual rate, which means your pension builds up faster each year
• Pensionable pay will include non contractual overtime and additional hours worked by part-time and term-time wokrers – so more of your earnings will count towards your pension
• Most part time workers will pay less for their pension as contributions for part timers will be based on actual pensionable earnings from 2014, not the full time equivalent as they are now
• A new 50/50 option means that after April 2014 you can choose to pay half the contribution to receive half the pension in those years while keeping full survivor benefit and ill-health pension protection. You can opt back into the full contribution for full pension rate at any time.
• If you are transferred to a private or voluntrary sector employer, you will still have the right to stay in the LGPS.

Current scheme members’ pensions benefits for service before 1 April 2014 are protected and will still be calculated on final pensionable salary on leaving service or retirement. The current normal pension age of 65 will continue to apply to this part of your pension. The existing Rule of 85 protections will still apply and members will not have their pension reduced if they are made redundant after the age of 55 regardless of normal pension age.

If you want to find out more about how these changes will affect you then go to http://www.unison.org.uk/pensions/lgps.asp"

UNISON NDC 12: What to do if your employer wants to close your pension scheme?

This picture is of me supporting the call for the TUC demo on October 20th was in the Friday morning edition of "London Calling" which is our regional conference new sheet. Next to it was this article I had written about:-  

"What to do if your employer wants to close your pension scheme?"

Tomorrow’s debate on the future of the traditional public sector pension scheme will be very important. But we must also remember the current threat to UNISON members in the Community and Private sectors.

Some employers have started consulting our members who work in Charities and housing association about getting rid of their pension schemes held with the Pension Trust and the Social Housing Pension fund. While the contractor Sodexo (which provides many privatised town hall and hospital services) is at this moment trying to close one of its defined benefit schemes.

If you are aware of any attempt to close your pension scheme you must get in touch with your branch ASAP. Do not believe the misinformation being put out about by some employers about how their pension fund deficits means they have no choice but to close. This is rubbish! In nearly all cases such “deficits” are completely artificial. Its "funny money". As everyone knows due to the recession the stock market is depressed and government bonds (which are used to measure such deficits) are at a 200 year historic low.

Most importantly, if you close your pension scheme it does not mean you get rid of the deficit. It is still there and could make things even worse since a closed pension fund has to sell its long term investments to raise cash to pay out existing pensions. 

I am writing a guide on what trustees and members should do if their employer tries to close your pension scheme. This should be out soon.

If the new look LGPS 2014 is accepted I hope it could become a model and beacon for all pensions schemes and lead to a rebirth of guaranteed defined benefit schemes - especially for the 60% of private sector workers who get no pension whatsoever from their employer".

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)

LGPS 2014: The Future of the British Sovereign Wealth Fund?

Yesterday there was an announcement that the trade unions, the LGA and the Government had come to an agreement on new proposals for the Local Government Pension Scheme (LGPS) in 2014.

If you are not in the LGPS bear with me, since this is an important issue.  The LGPS has assets worth over £145 billion and collectively is the biggest pension fund in the UK and the 4th biggest in the world. It is a major shareholder in Britain and the world economy. Arguably it is the British equivalent of a Sovereign wealth fund. Over 4 million Brits are members of the LGPS with 1.6 million active members in England and Wales alone.

Why I understand that there are a lot of people who have genuine fears and concerns about these proposals there is also a lot of old nonsense being put out by the usual suspects who should know better and are just scaremongering.

I'll use a comment in a post I did yesterday from the "we don't care how good this offer is we just want to go on strike all the time to bring about the revolution" brigade to illustrate what I think about the proposals.

I will say this is early days and once we have been properly briefed on the offer and given time for it to sink in I will probably post again. Please note that is my own summary and interpretation and no-ones else's.

Q. Are we paying more?
A. No, average contribution remains at 6.5% gross.  Some part time workers may well pay even less. Those earning under £43,000 per year will pay the same while those who earn more will pay a little extra but after tax relief even those who earn over £150,000 will still pay less than 7% net. At long last if you have financial problems you will be able to reduce your contributions by 50% (with reduced benefits) until things improve rather than just pulling out.

Q. Are we getting less out?
A. No, the majority of members will get more out of LGPS 2014 than the deal in 2008. The accrual rates is far better. It is also a more valuable and better scheme. Especially for the low paid. For too long we have allowed a small number of very high earners to milk our pension scheme for their own benefit. For the first time workers will also build their pensions on non contractual overtime and allowances. A real improvement to those who rely on such money.

Q. Are we working longer?
A. Yes, in line with state pension age. Many of our members earn so little that they will not be able to retire without the state pension in any case. Remember we're living longer. It's supposed to be a good thing. In return we get a world class guaranteed pension scheme. There is also a 10 year protection. There also may be scope for members to "downsize" when they are older into less stressful and demanding jobs under Career Average than Final Salary

In many ways this is unfinished business from 2008. There was no agreement reached back then about future cost sharing over longevity. It had to be sorted sooner or later. Final Salary was always unfair to the mass of our members when compared with a decent Career Average scheme. We also never could agree with the need to modernise, get meaningful member representation and consider merger to deal with the 101 different ways that the financial services industry rips us off (i.e 101 separate LGPS funds).

What I really hope is that LGPS 2014 can be an an affordable and sustainable model for pension schemes that the millions and millions of public and private sector workers who don't have any access to such security in old age.  If we don't get such a model established in the private sector then the public sector schemes will always remain vulnerable.

What happens next? We ballot. Let the members decide.

"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

"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?