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Protect Our Pensions

Protect Our Pensions. The crisis is not of our making. "The price of this financial crisis is being borne by people who absolutely did not cause it, now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has.“

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Protect Our Pensions

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  1. Protect Our Pensions

  2. The crisis is not of our making • "The price of this financial crisis is being borne by people who absolutely did not cause it, now is the period when the cost is being paid, I'm surprised that the degree of public anger has not been greater than it has.“ Mervyn King – addressing the Treasury Select Committee

  3. 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 • Fair Deal – TUPE transfers and pensions

  4. ATTACK NUMBER 1 THE CHANGE FROM RPI TO CPI • 22nd June 2010 – Emergency Budget outlined the change from RPI (Retail Price Index) • to CPI (Consumer Price Index) What does this mean to me? CPI is typically on average 0.7% per year lower than RPI, therefore your pension will now increase at a lower level.

  5. IMPLICATIONS OF CPI CPI RPI April 2011 April 2011 3.1%4.6% • Even Govt. Advisers say this change will mean an average cut of 15% in pension benefit • As a result of the 2010 Emergency Budget LGPS members are likely to lose a quarter of the value of their pensions over the next 25 years.

  6. ATTACK NUMBER 2 • Contribution Increases • The Government announced a cut in funding to our pension schemes of £3.8 billion a year by 2014/15 What does this mean?: This means that you will be paying just over a 3.2% contribution increase into your pension – 50% MORE THAN YOU CURRENTLY PAY! THIS IS EFFECTIVELY A GOVERNMENT TAX OF £4 BILLION TAX ON PUBLIC SECTOR PENSION SCHEMES

  7. ATTACK NUMBER 3 Move away from a final salary scheme • Attack 3 – 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 • Lord Hutton stated in his Interim Report on • 7th October that final salary schemes • “disproportionately” favour high flyers. • He has recommended switching to a career • average scheme by the end of the next • parliament = 2015.

  8. What is a career average scheme? • This is a scheme that rather than base benefits on the final salary you retire on it calculates them on your average earnings during your scheme membership • Such a scheme could potentially benefit members whose annual salary increases are generally less than the index used to increase pensionable pay and who are unlikely to benefit from regular promotions • There is no detail yet so UNISON cannot comment on it. The CARE scheme must not be a cost-cutting exercise

  9. ATTACK NUMBER 4 INCREASING THE STATE PENSION RETIREMENT AGE (SPA) • From November 2018, the SPA will be 65 for 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 67between 2034 -2036 and 68between 2044 - 2046

  10. For those now 34 or younger it will be 68. • For those between 34 and 42 it is67. • For those between 42 to around 57 it will be 66.

  11. A Summary of What Would Happen if They Get Away With This • Contribution increases • A move from RPI to CPI for increasing pensions • A possible move away from a final salary scheme • Increasing retirement ages • A worsening position for TUPE transferred members

  12. So, You Want us to Pay More? Work Longer? to Get Less?

  13. LET THE FAT CATS PAY FOR THEIR OWN MISTAKES JOIN UNISON IN ITS CAMPAIGN TO SAVE OUR PENSIONS

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