UNISON PENSION BRIEFING

1. UNISON PENSION BRIEFING Willie Duffy Regional Organiser

2. 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

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

4. 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 opt-out 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

5. Contribution Increases The Government announced in the CSR a cut in funding to PAYG schemes of £2.8 billion a year by 2014/15 This equates to just over a 3% contribution increase on average for members Contributions to be phased in “progressively” from 2012, with a 40% saving in 12-13, another 40% in 13-14 and the remaining 20% in 14-15

6. What are the current NHSPS contributions?

7. Table 1: Proposed increases to contribution rates (before tax relief)

8. Table 2: Contribution rates (after tax relief applied)

9. The Move to CPI The Government has changed the increase in public service pensions from RPI to CPI from April 2011 The consequences are very significant. CPI is typically, on average, 0.7% per year lower than RPI The OBR predict that pensions will be 8.5% less by 2017 Lord Hutton says move represents a 15% cut in benefits

10. The Implications of CPI Pensions are likely to increase from April by 3.1% this year when otherwise would have increased by 4.6% A woman on the median NHSPS pension of approx £3500pa will be around £53 worse off A member receiving the overall average public service pension of around £7800pa will be around £117 a year worse off

11. 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

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

13. Increasing Retirement Ages? 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 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 Lord Hutton has stated that with exception of “uniformed services” NRA’s should increase in line with SPA

14. Campaign Objectives -no one can do everything but everyone one 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

15. 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.

16. 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 10am • 30 November – day of industrial action, plus city centre rallies of support

17. 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