Tuesday, September 06, 2011

Protecting Your Pension from Tory Dummies

Well done to Barnet Local Government branch and UNISON for commissioning an independent report on the threat to pensions and the likely huge cost to Council taxpayers from Tory policies. Local and national.

First Actuarial LLP warn that the Tory led government plans to increase contributions to the Local Government Pension Schemes (LGPS) by up to 50% could cause many council workers to leave. They will simply not be able to afford it anymore, especially after years of no pay rises, tax increases (and high inflation).

While Tory "easyjet" Barnet Council are trying to outsource nearly all its services.  This will result in even less active members of the scheme.

The government is considering getting rid of Labour's "Fair Deal" for pensions and banning Council workers who are outsourced from being in the LGPS at all.

What this collapse in scheme membership could mean locally is that the pension cash flow in Barnet Council will move from being £22.9 million per year in the black to being £25 million in the red! With fewer contributors to the pension this could double the fund deficit. This will also mess up the investment strategy and make the scheme pull out of equities and pursue a low growth policy. Which will make funding even worse.

Barnet has already had to pick up a bill for £1.4 million in June this year after a private contractor went bust. More outsourcing, more risk to the scheme.

Barnet is of course a rabid Tory borough but all Councils potentially, face huge potential financial problems from these policies. If the Government goes ahead and forces pension contributions to rise by a half and the outsourcing of services and workers continues, this will dramatically increase the risk and cost of the pension fund (to Council taxpayers).

The LGPS protects millions of ordinary working people from extreme poverty in old age. The Tories, locally and nationally, risk destroying it.

(BTW shame that someone did not check the facts and even used this report to attack their own union! not that I'm surprised...)
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