PUBLIC SERVICE PENSIONS UNDER ATTACK
Posted on Wednesday, January 25, 2006
Occupational pension schemes and their future has become the most important trade union issue for many years. The trade union movement are at one in wanting to ensure that existing and future members of schemes have a pension worth having. CYWU have a clear position in defending occupational pension schemes, no worsening of benefits and no extra cost to our members.
The way things are going we could end up seeing the biggest industrial dispute since the General Strike in 1926. Many unions are looking at the possibility of taking simultaneous action if changes to the schemes are pushed through. Most will recall that prior to the General Election some public sector unions were looking at balloting members over attacks on pension schemes, which resulted in the government postponing the changes to allow negotiations and consultation on this issue. The trade union side were clear that this should look at the long-term future of the schemes. This has resulted in the employers in the Local Government Pension Scheme coming back with worse proposals than were discussed earlier in the year and this was to just get over the short term. Trade unions Including CYWU, in talks with both the employers and Officials from the Office of the Deputy Prime Minister have made it clear they do not want to just look at a short term fix but want to look at the long term future.
Meetings have also been taking place at the TUC, where local government trade unions have been joined by teaching and civil service trade unions in order to keep unity in defending our occupational pension schemes. It is a long time since such unity and anger has been in evidence.
Some of the options that have been discussed will have dramatic consequences for our members in both Local Government and Teachers Pension Schemes. To outline some that have been mooted:
- Increases in employee contributions for young workers in order to keep present benefits. This increase to be between 2.5% and 4% these are projections. This does not mean that the Government or Local Authorities would be paying anymore. To put this into perspective when Occupational Pension schemes were doing very well the employers in many schemes took what were called pensions holidays. This meant that they made no contribution because the scheme was so well off. Note that there was no such holiday for employees.
- Increase in the minimum age you are able to draw benefits from 50 to 55 (unless on health grounds)
- The ending of the 85-year rule. This applies to the Local Government Pension Scheme. This is where if you add up your age and number of year’s service, if it comes to 85 or more than you can apply to retire. The reason for wanting to end this is that it will be in conflict with Age Discrimination Legislation. Given that this legislation is still being consulted on and not likely to be in force until October 2006 this seems premature. How can you be in conflict with a law that is not yet in force?
- The Government has a position of wanting the normal retirement age for public sector pensions scheme to be 65.
- As part of the short-term fix for the Local Government Pension Scheme they want employees contribution to be increased by 1% for 2006/07 and 2007/08. What a cheek less benefits for more contribution. This will equate to a pay cut of 1% for all paying into a Local Government Scheme. This could rise if contributions are increased for new entrants or younger workers.
- No transitional protections.
- Some schemes are looking at career average for basing the pension, rather than final salary.
These changes should be looked at alongside discussions already taking place in Government about increasing the retirement age anywhere between 67 and 70.
There is an old saying in the trade union movement, “The past we inherit, the future we build.” Well, we have inherited decent pension schemes, which were fought for by previous trade unionists we should be building on these, and not allowing them to be dismantled. It is now our turn to defend these schemes not just for ourselves but also for younger generations so we can give them an inheritance worth having. As workers who advocate on behalf of young people how would you be able to talk to them about rights and responsibilities if we don’t take our responsibilities as trade unionists in defending and advancing terms and conditions including pensions schemes seriously.
If this Government is willing to spend billions of pounds on a war in Iraq, which has seen the deaths of innocent Iraqi children, then we should be saying it is time you spent some money giving us decent pensions at an age where we will have the time to enjoy it. Not having to work until you drop for a pittance.
This is an issue where there can be no fudge, no back tracking or capitulating we need to be strong, stand together and ensure the future of Occupational Pension schemes.
It could be that in the very near future we, along with other trade unions will be balloting our members so keep this in mind, they want you to work longer, pay more for less benefits and dismantle the decent schemes we already have in place.
CYWU are treating this issue as a priority and will be using its best endeavours to resist any detrimental changes but if negotiations do not have the desired effect we will be going to ballot and urging members to return a massive yes vote for industrial action.