UNISON Pensions decision: jaw-jaw better than war-war (for now)

In a victory for common sense UNISON elected lay reps have voted to continue with negotiations

over Local Government and NHS pensions.

This morning there was a two hour Pension Summit with 250 senior lay reps present were it was clear that an overwhelming majority of branches, up and down the country, wanted negotiations to continue.  While reserving the right to call further action if these talks break down. Their was near unanimous agreement that there had been a significant improvement in the offer over pensions and that we had a duty to talk not walk.

Next there were separate detailed briefings on the Local Government and NHS pension schemes after which the different Service Group Executive's (SGE)  met and debated on what to do next.  I am really pleased that all the SGE's voted to talk further. 

One sour point in an otherwise positive and constructive day is that it is clear that certain "individuals" outside the union have been telling completely despicable lies about UNISON and trying to interfere in our internal democratic process.  Now while I can respect the opinion of those who genuinely feel that UNISON have made a wrong call.  This is the decision of our democratically elected representatives. What many UNISON reps will not tolerate is unrepresentative, ultra left sects playing out their toy town revolutionary fantasies at our expense. We will not do what we are told to do and think by rule or ruin wreckers and splitters.

UNISON Pension Strike Ballot Paper

I came home from work this evening to find this ballot paper in the post.  I marked X, put it in the free post envelope and went to the nearest post box.

Hint, Hint. 

LGPS Pension matters 2

More good stuff about the sustainability of the Local Government Pension Scheme (LGPS and all well run Final Salary schemes) from various sources.

(Picture is of UNISON LGPS pension reps)

The current LGPS is not the cause of increases in Council Tax or cuts in local services. In fact money equivalent to less than 6% of Council Tax revenue goes towards the LGPS, about £70.50 a year for an average Council Tax paying household in England. The numbers being peddled by those opposed to quality pension provision in the UK are dangerously misleading for a debate that should be considered not a forum for shallow point scoring.

Of that contribution it is the funding owed for past service that is often the greater part. Past underfunding by employers has meant that insufficient funds have been put aside for future pensioners. However, as a funded scheme, unlike the others in the public sector, the LGPS has over £120bn in assets, a figure sufficient to pay benefits for more than 20 years without any additional contributions being made. In addition the LGPS receives £4-5bn more in income than it spends in benefits every year, ensuring its enduring viability.

Even in the current economic climate the LGPS received nearly £3bn in income from its investments in 2008-9. The scheme is a major shareholder in British businesses, property and regeneration. This is on top of the contribution it makes to the income of more than one million current pensioners many of whom would be entirely reliant on taxpayer financed state benefits if it wasn’t for the Local Government Pension Scheme.

The local government trade unions believe that the drive to the bottom approach to pension provision being led by the Conservative and Liberals will lead to millions more pensioners suffering and significantly increased pressure on public services.

Everyone should bear in mind that the scheme was reformed in 2008 with some benefit changes and increases for employees in their contributions with the Government and employers being party to the new scheme.”

Also UNISONactive quotes Labour Minister John Healey who said in May 2009 that a defined contribution scheme would result in the average pension for a local Government worker reducing from it’s current £4,000 to about £1,000. While this “Big improvement in values of funded pension schemes” BBC report was for some reason not on the front page of the Torygraph or Daily Hate.

Hat-tip thingy of course to Tom P at Labour & Capital who has recently pointed out (here) that the elephant in the room over final salary pensions is longevity. In the LGPS we have now agreed to talk with employers about fluctuations in the cost of future service.  The biggest challenge is making up for inadequate contributions made in the past by employers.  If the LGPS was replaced then past liabilities will still have to be paid for - So what is the problem?

I would also add that if we got rid of LGPS you would have to replace it with something else which would have to provide a pension and this could even cost more!

That poor governance practices in the LGPS by certain Councils who have run it as a private dining club has contributed massively to poorer investment returns which has dragged down its overall results.

It is madness that there are so many “tiny” LGPS funds who all tender for, appoint and then employ individual private fund managers and individual advisors. We should rationalise the LGPS into a much smaller number of large, well resourced funds who will employ in-house fund managers who would slash costs and improve performance. The most successful big LGPS funds already do this.

The Witch-Hunter General - Trot of the Rogers has recently pinched my long running argument that the LGPS could actually be extended to all employers and employees. Arguably you don’t need a change in the admission rules since membership could be allowed to any employer who provides services that a local authority “has or could provide”. Which I understand now is pretty much everything. The self-employed (White van person) who are most concerned about their lack of provision and the “trustworthiness” of ill-health and pensions on offer could even benefit the most?

The UNISON website here makes many of the same arguments as the GMB but its “myth busters” argument also adds that “Over 50% of the cost (of the LGPS) is met by employee contributions and investment returns”.

While UNISONactive have commented on the success of UNISON in forcing the government to stop councils using LGPS money to lend to themselves at super cheap rates. This alone cost the LGPS at least £131 million last year alone.

Rant over...for now. Watch this space.  Hat-tip Tom P

Update: been pulled about about unions "agreeing" to longlevity review.  There is an agreement for possible further discussions if it becomes an issue in the future.