Transcript Title of presentation

UNISON
PENSION
BRIEFING
Willie Duffy
Regional Organiser
Don’t panic – nothing is going
to change immediately
 Negotiations with UK government are continuing until
October
 The Scottish Government issued a consultation
paper over proposals to increase employee
contributions.
 No increases in contributions until April 2012
 There is commitment not to reduce benefits earned
before the date of any change in the schemes.
 Changes to schemes likely to be for benefits earned
after 2014/15
 Don’t opt out
Public Sector Pensions - What Are
The Key Issues We Face?
 Change to the way pension increases
are calculated – RPI/CPI
 Scheme contribution increases
 Retirement age increases
 Benefit changes to career average
The Key Issue – Contribution
Increases
 This is a tax to pay back government debts that were
raised to bail out the banks
 Not one penny of the money will go into the scheme
 It threatens the whole system – if enough members optout
 It unites all public sector workers in or have access to a
scheme
 It could allow public sector unions to co-ordinate action
 We need to consult members and prepare for a ballot
for industrial action
Contribution Increases
 The Government announced in the CSR a cut in
funding to PAYG schemes of £2.8 billion a year by
2014/15
 This equates to just over a 3% contribution increase
on average for members
 Contributions to be phased in “progressively” from
2012, with a 40% saving in 12-13, another 40% in 1314 and the remaining 20% in 14-15
What are the current NHSPS
contributions?
If your whole time pay rate is:
You pay a contribution rate of:
Up to £20,709
5%
£20,710 to £69,392
6.5%
£68,393 to £107,846
7.5%
£107,847 +
8.5%
Table 1: Proposed increases to
contribution rates (before tax relief)
Table 2: Contribution rates
(after tax relief applied)
The Move to CPI
 The Government has changed the increase in
public service pensions from RPI to CPI from
April 2011
 The consequences are very significant. CPI is
typically, on average, 0.7% per year lower than
RPI
 The OBR predict that pensions will be 8.5% less
by 2017
 Lord Hutton says move represents a 15% cut in
benefits
The Implications of CPI
 Pensions are likely to increase from April by 3.1%
this year when otherwise would have increased
by 4.6%
 A woman on the median NHSPS pension of
approx £3500pa will be around £53 worse off
 A member receiving the overall average public
service pension of around £7800pa will be around
£117 a year worse off
The possible move away from a
final salary scheme
 Lord Hutton stated in his Interim Report of 7
October that final salary schemes
“disproportionately” favour high flyers
 He has recommended switching to a career
average scheme for public service workers by the
end of the next parliament – i.e. 2015
 Crucially he has stated that each year’s pension
earned should increase in line with increases in
average earnings
What is a CARE scheme?
 This is a scheme that rather than base benefits on
final salary bases them on average earnings over
a scheme membership
 Such a scheme could potentially benefit members
whose annual salary increases are generally less
than inflation and who are unlikely to benefit from
regular promotions
 The devil is in the detail however and UNISON is
not necessarily against a CARE scheme as long
as it’s not a clear cost-cutting exercise
 The new scheme for civil servants is a CARE
scheme
Increasing Retirement Ages?
 The Government has already brought forward
the State Pension Age (SPA) equalisation date
meaning that from April 2018 the SPA will be 65
for both men and women
 From April 2020 the SPA will be 66 for both men
and women. Under current legislation the SPA is
due to rise to 67 between 2034-2036 and 68
between 2044-2046
 Lord Hutton has stated that with exception of
“uniformed services” NRA’s should increase in
line with SPA
Campaign Objectives - no one can do
everything but everyone one can do something!
 Prepare members and staff to resist attacks on
public sector pensions and their members
 Support negotiators to achieve the best outcome
possible and prepare for industrial action
 Make sure that UNISON members and staff gain
a greater understanding of public sector pension
schemes – remove the pension jargon fog
Champions and Contacts –
training
and support will be given
Pensions Champions - Will take a greater role by making make
sure union briefings and information on changes to
public sector pensions are understood by the branch, workplace
pension contacts and members. They will take a lead role in
Supporting contacts, developing local campaign initiatives
making sure that the branch and members are prepared to take
action to protect public sector pensions.
Pension Contacts - Distribute material, take actions when
requested. They will be the workplace feedback link between
members and the campaign/negotiators. Talk to and recruit non
members.
Pensions ballot - timetable
28 September – ballot notices dispatched to all employers being
balloted
11 October – ballot for industrial action over pensions opens
17 October – if members have not received ballot paper, they
can phone UNISONdirect to request one until noon on 31
October
3 November – ballot closes at 10am
30 November – day of industrial action, plus city centre rallies of
support
Where can you find everything?
Scottish Pension Web Pages
http://www.unison-scotland.org.uk/pensions/index.html
UK Campaign Web Pages
http://www.unison.org.uk/pensions/protectour.asp
Advice on Pensions
http://www.unison.org.uk/pensions/index.asp