UNISON Community e-news: Voting YES in LGPS ballot is "vital"

Community e-news

July 2012

UNISON’s e-newsletter for the Community service group

Vote “Yes” in the LGPS ballot

The leadership of UNISON’s Community service group is urging members to vote “YES” to accept the proposals for a new Local Government Pension Scheme.

Service Group chair Kevin Jackson said: “This is a vital vote for all our members in housing associations and charities.

·         If you are in the LGPS, then it’s a good deal, especially for part-time workers.

·         If you are not in the LGPS, then keeping a high quality scheme for public service workers will help put the brakes on other employers who want to ‘dumb down’ pension schemes.

·         If you are being TUPE-transferred then the “Fair Deal” for pensions is being beefed up to give you more protection too.

“Not all members are in the LGPS.  But we have to ballot everyone in employers which have some members in the LGPS.  We are also working hard to protect the Social Housing Pension Scheme and other pension schemes.  A high turnout in the ballot will send a message of strength to the government. 

Make sure you vote!

The ballot runs from 31 July to 24 August, and members can vote by post or online.  There is more information on www.unison.org.uk/pensions/lgps.asp.

Pensions: Fight to keep schemes! and “auto-enrolment”

Members in the Social Housing Pension Scheme (Pensions Trust) need to be aware that their employers have been sent letters about the deficits in their pensions schemes which is causing some employers to panic and start talking of closing the scheme or massive increase in contributions.  There has also been some outrageous scaremongering by some financial “advisors” to schemes.  UNISON is arranging an urgent meeting with the Pensions Trusts.  In the meanwhile if your employers starts talking of any changes to your pension scheme please contact your branch and UNISON’s pensions unit immediately and ask your employer to send copies of what is being proposed.

Remember – the current pension so-called “deficits” are valued in a completely discredited and inaccurate manner which even the current Pensions minster has recognised is wrong and needlessly “killing” good pensions schemes. Remember closing a pension scheme does not get rid of any deficit - in fact it can make things worse.

Finally, for everyone, “auto-rolling” for pension schemes is starting from the end of this year. Nearly all employees who are currently not in a pension scheme will be automatically enrolled into the employer’s scheme or a state scheme. Now this may be “good news” for those not in a scheme but we are concerned about some employers who currently have decently funded defined contribution schemes (“final salary” or “career average” schemes) may be tempted to cut existing employer contributions, since they are worried about an increase in the pension bill from more people being in it.  We have to fight this as well. Pensions are expensive.  Employers’ have to realise that unless they want their staff to retire in poverty they have fund pensions properly.

Pensions are obviously not boring nor are they as complicated as you think. We need to have at least one UNISON Pension Champion (or contact) in every employer.  If you are interested in being a “Pension Champion” let us know and we will sort out some training for you on the role in the very near future.

Contact: pensionsm@unison.co.uk

(top two stories on pensions in this months Community e-news. Check out rest of news here on
campaigns and research against cuts and austerity; pay deals and employer reports from around the country; activity in regions; and a new chair for your service group executive).

"Housing bodies fight to protect staff pension pots"

Today the Social Housing Magazine "Inside Housing" led with a report that housing organisations are to challenge a threat to their workers' pensions.

The Pension Trust which administrates the Social Housing Pension Fund (and many other Community and voluntary sector pension funds) is being blamed for attempting to force employers to close decent defined benefit schemes and force them to open less secure defined contributions schemes. This is supposed to be about rising pension "deficits".

To be fair to the Pension's Trust I have had conversations with people closely connected with the Trust and they say that they are fully committed to keeping these schemes affordable and open.

This morning I posted these comments on the Inside Housing website.

"While it is good news that Housing organisation are going to fight to protect their pension schemes it is absolutely vital that everyone understands that these “deficits” are frankly meaningless.

The cost of pension schemes is measured by a discredited and outdated accounting system called “Mark to Market” which even the Pensions minister Steve Webb described as a “Nightmare” which is “killing” perfectly good schemes. He has promised “not to stand “idly by” and to do something.

All employers and defined benefit pension schemes must not panic or over react. They should be working jointly with the trade unions to resolve this temporary problem. Remember closing the scheme will not get rid of the deficit. It can make it even worse.

Modern defined benefit pension schemes are as sustainable and affordable now as they have ever been. 

John Gray Branch Secretary UNISON Greater London Housing Association Branch"

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".

"Housing staff face massive pension hikes"

I was contacted by "Inside Housing" (trade magazine for Social Housing) this week about possible significant increases in pension contributions for members of the Social Housing Pension Scheme (SHPS).  What I told them is hardly rocket science, but after years of below inflation wages increases (and savage cuts in care and support) if the cost of pensions go up then members will leave the scheme.

I have also posted on line this comment:-

Can I recommend that if anyone learns that their employer is considering increasing contributions or closing their scheme to contact their trade union. UNISON is in the process of organising a meeting with the Social Housing Pension Fund and also will want to meet with employers.

Please remember that this “deficit” is an accounting figure which is almost entirely bogus and due a double whammy of recent exceptionally low fund management returns and a 200 year low in the price of gilts. Some things might have to change but defined benefit schemes are as affordable now as they have ever been. Housing associations should not panic. They will only run the risk of making the deficit seem even worse if they do. Instead they should meet up with their unions and negotiate a way forward.

and in reply to a blog by its Editor here

Sorry Stuart but it would not be a pragmatic step to consider closing the scheme nor raising contributions significantly. It could make things very much worse. This “deficit” is completely artificial and discredited accounting figure due to a double whammy of recent exceptionally low fund management returns and a 200 year low in the yield of gilts.

The Pensions Minister accepts that this "mark to market" accounting should be reviewed. Even the Bank of England says that you should not take a "mechanical" viewpoint of such "deficits"....

In housing management we see first hand the awful consequences of poverty in old age. Defined benefits schemes gives dignity in retirement for millions and should remain as the cornerstone of decent occupational pension provision.

I am also writing a guide/resource for the AMNT on what should trade unions and trustees do if their employer decides to try and close their defined benefit scheme (or increase costs so much it will close)