UNISON PENSION BRIEFING Willie Duffy Regional Organiser Dont

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 q The Government announced in the CSR a cut in funding to PAYG schemes of £ 2. 8 billion a year by 2014/15 q This equates to just over a 3% contribution increase on average for members q 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 q The Government has changed the increase in public service pensions from RPI to CPI from April 2011 q The consequences are very significant. CPI is typically, on average, 0. 7% per year lower than RPI q The OBR predict that pensions will be 8. 5% less by 2017 q Lord Hutton says move represents a 15% cut in benefits

The Implications of CPI q Pensions are likely to increase from April by 3. 1% this year when otherwise would have increased by 4. 6% q A woman on the median NHSPS pension of approx £ 3500 pa will be around £ 53 worse off q A member receiving the overall average public service pension of around £ 7800 pa will be around £ 117 a year worse off

The possible move away from a final salary scheme q Lord Hutton stated in his Interim Report of 7 October that final salary schemes “disproportionately” favour high flyers q He has recommended switching to a career average scheme for public service workers by the end of the next parliament – i. e. 2015 q Crucially he has stated that each year’s pension earned should increase in line with increases in average earnings

What is a CARE scheme? q This is a scheme that rather than base benefits on final salary bases them on average earnings over a scheme membership q 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 q 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 q The new scheme for civil servants is a CARE scheme

Increasing Retirement Ages? q 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 q 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 q 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 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 10 am 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