Thursday, May 31, 2012

"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


8 comments:

Anonymous said...

few questions -

are we paying more?

are we getting less out?

are we working longer?

John Gray said...

Hi anon

It’s complicated but:-

No

No

Yes

We're living longer. Its suppose to be a good thing. In return we get a world class guaranteed pension scheme "for 25 years" that is also an affordable and sustainable model that can be used by the millions and millions of public and private sector workers who don't have any access to such security in old age.

I'll post further tonight

Anonymous said...

I thought the last deal was supposed to be affordable and sustainable - so I guess we need to add (after 25 years) "or until there is a change of government or a new witch hunt against the public sector".

Personally I think it is outrageous that the media and tory and liberal politicians continually identify the LGPS as being the same as the non-contributory schemes (eg civil service).

One thing is for sure - this change has been pushed for by the tory town hall mandarins who control the LGA for a long time before the "international financial crisis" so forgive my cynicism if I fail to believe the "world crisis" rationale and cannot see anything better in this deal than what was negotiated in 2008. Life expectancy has not changed that much in 4 years ( it may even be less !!).

But "it was the best we were able to get" probably is about right as the vilification of public sector workers continues and the "levelling down" process begins to (try to) disguise the appalling nature of most private sector schemes. Don't hold your breath for the private sector to level up.

So I suppose I should console myself with the thought that it is still better than the crap most private sector workers get.

Vote tory and get crapped on is the lesson to take from this methinks.

spartacus

John Gray said...

Hi Spartacus

I've posted here a reply of sorts. I think things are more complex than you think.

http://grayee.blogspot.co.uk/2012/06/lgps-2014-future-of-british-sovereign.html

Anonymous said...

Er Im Spartacus!

Anonymous said...

No, I am Spartacus!!

Andrew said...

Actually it's yes yes and yes

Pay more: well most not on a monthly basis but over time you wil!

Get less: almost certainly both in real terms to what paid in and on any reasonable prediction of economy. I see after some criticsam a link to doc suggesting otherwise has been removed!

Work longer: no dispute on that one.

John Gray said...

Wrong, Andrew

Not that it really matters but when are the ultra left going to stop throwing their toys out of the pram and realise that this potentially is a historic deal for the union and its members?

For too long the scheme has been ripped off by the high paid and the financial services industry. Now we have an opportunity to make the scheme work for all. In the face of DB schemes falling like ninepins in the private and public sector we now have a chance of reversing decades of decline and get decent guaranteed pensions for all workers, not just a minority.

Of course, it you are not interested in getting a good deal for your members because you're strike chasing and you want to destroy the LGPS ‘cause it will somehow bring about the revolution - then carry on and campaign against it. The Tories right will be cheering you on and on(not for the first time).