[Closed] Forthcoming industrial action - Scotland

From Mr Toad.

I am writing to set out the way in which we are handling the first phase of the UK Government’s pension reform agenda and to explain the reasons behind it.

The UK Government has decided to increase pension contributions for public sector workers from April 2012. They intend to raise £2.8 Billion by this means across the UK by April 2015. This equates to an average increase in pension contributions of 3.2% of salary.

Public sector workers are entitled to pensions that are affordable, sustainable, and fair both to workers and to taxpayers. We are strongly opposed in principle to the UK Government’s policy of increasing contributions. At a time of pay freezes, significant increases in national insurance contributions, higher VAT, rising inflation and fuel costs, we believe it is wrong to require public servants to have to increase their pension contributions.

The UK Government has made it crystal clear that if we do not implement the increase in pension contributions then they will reduce the amount of money in the Scottish Budget. This applies to everyone in the Scottish NHS, Teachers, Police and Fire pension schemes. The impact of that would be to reduce the Scottish Budget by over £100m in 2012-13 and by more than £550 million over the next three years. This would have an immediate, significant and detrimental impact on public services and the size of the public sector workforce.

We will continue to argue for the UK Government to change its course. But given the fact that we face a deduction to our funding in April 2012 by the UK Government if we do not act, we have no option other than to commence a consultation exercise to determine how the increase in contributions are implemented across these four pension schemes. We do this with great reluctance.

We will be issuing our consultation for the NHS, Teachers, Police and Fire schemes later this week. These will set out proposed member contribution increases for 2012-13 only. We will consult on proposals for potential second and third year increases at a later date.

We are committed to genuine engagement with all our stakeholders on these proposals and I would encourage you to contribute actively to that process.

The responsibility for civil service pensions is reserved to the UK Government. They have already announced a consultation on the application of this policy for all civil servants including those working in Scotland.

We are extremely aware of the challenges faced by public sector workers during these difficult times. We are taking a number of positive steps to address these. In light of the UK Government’s decision on pensions, the Scottish Government has given an agreement to extend our existing no compulsory redundancies policies for a further year for the bodies which are covered by the public sector pay policy, subject to the agreement of flexibilities which protect workforce numbers. We have also extended our commitment to pay the increased Scottish Living Wage of £7.20 an hour to all staff under the Scottish Government’s responsibility in the same period, and in the pensions discussions we will do all in our power to protect the position of the low-paid.

I deeply regret that this action has been forced upon us. Scotland is very proud of the dedication and professionalism of its public sector workforce. I know that, irrespective of your views on this issue, you will continue to focus on doing what you do best – delivering world class services to the people of Scotland.

Alex Salmond

The toad never writes to me! We'll be getting shafted soon as well then I guess. Course the SNP could raise the money they'll be cut in the next few years by ending the silly council tax freeze.

That'll be the same council tax freeze that was a manifesto commitment and upon which issue they were elected? The same council tax freeze that the Labour Party also (latterly) promised?

I like it the way it is, thanks all the same.

I'm aware it was a manifesto commitment - I didn't agree with it personally, and didn't vote for them. Labour adopted it late in the day, but I didn't vote them either. I'm not one of Scotland's 342 tories either 🙂

Err... 341 at the latest count!

So yet again i have to pay so the the big banks can get their balance sheets sorted and the shareholders can get more payoffs.

Tories looking after their own at the expense of the ordinary man.

As far as im concered i signed up to an employment contract that included a pension, how can they change this without any comeback.

Work as a teacher untill im 69!!! who knows what they will try and put it up to over the next 10 years 75!!

Not all average ages are the same in the UK, Male from Glasgow overweight and left handed, im lucking if i see 65!!!

They just want me to dies before i get any pension. FFS i am paying £200 a month for my pension as it is.

This is one issue that will not be swept under the carpet.

I got the 'vote yes' bumph in the post from Unison today.

Two facts stuck out for me

1. If it closed today, the local government pension scheme could still pay all its liabilities for 20 years.
2. The Treasury gets £2bn more in NHS Pension contributions than it pays out in benefits every year.

Staggering 😯

1. If it closed today, the local government pension scheme could still pay all its liabilities for 20 years.

http://www.bbc.co.uk/news/business-11446833
Is the scheme funded or unfunded?

Funded. The pensions are paid for by underlying investment funds, not out of general taxation.

Is the scheme deemed to be in deficit or surplus?

In 2007 there was a deficit of £27bn for the funds in England and Wales.

"The funds in England, Wales and Northern Ireland are currently undergoing their triennial valuations, as at 31 March 2010," said Terry Edwards of the local government employers organisation.

"The outcome is likely to be that many of the funds will currently be in deficit although some may be in surplus - we will not know until the valuation reports are issued.

"The funds in Scotland undergo their valuations next year, at 31 March 2011," he added.

What is the value of the scheme's assets and its liabilities?

The LGPS is funded, like the universities' scheme but unlike the other public service pension schemes At the last scheme valuation in 2007, scheme assets were valued at £132bn, with pension liabilities valued at £159bn.

Why not try putting your contributions into this calculator
http://yourmoney.moneyadviceservice.org.uk/tools/pension_calculator.html

Woody the Teachers pension scheme is also in surplus, and the new deal in 2007 stated that any deficit would be paid for by the teachers.

The change in the inflation calculations have made a massive difference to how affordable the pensions are.

I work for the same Local Authority as you S_F (as you know).

Here are some figures pertaining to the education sector, courtesy of my union and pending independent verification (I don't mean this to be a "us poor teachers" whinge because I know many public sector workers are in a similar situation as are many in the private sector, I'm merely outlining the situation in my profession):

Average increase in pension contributions from 6% to 9% (you see where the "3% increase in contributions" that is bandied about in the media comes from). An increase of around 50%.

Average teacher's pension will be worth less because it will be a "career average" rather than "final salary" - pensions could be worth up to 40% less on retiral.

NPA to be replaced by SPA so teachers will have to work to 66.

CPI currently lags behind RPI by about .7% - this gap [url= http://www3.hants.gov.uk/finance/retailpricesindexandconsumerpriceindex.htm ]has been wider[/url]

The "average" teacher's pension is worth about £14000 pa at the moment.

Teachers are currently enjoying a two year pay freeze.

The average MSP's pension is worth £41000 pa. The accrual rate is higher (40ths rather than 60ths) There are no plans to make changes to this scheme.

Go figure...

if it closed today, the local government pension scheme could still pay all its liabilities for 20 years.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/12/100bn_hole_in_local_government.html

57. The cost of pensions being paid will continue to rise. The SPPA estimates that total payments to pensioners for the NHS and teachers’ schemes will exceed employers’ and employees’ contributions after 2010/11. This gap is projected to rise to £489 million by 2014/15 (Exhibit 8, next page). There is also a risk that pension costs will increase further if the rate of inflation rises because pensions are increased annually by the rate of inflation.

http://www.metro.co.uk/news/867663-union-bosses-pensions-equal-to-members-pay

The email stated that the Scottish Government has confirmed that it does not intend to increase pension contributions for the local government pension scheme

This clause surprises me, Dan. I'd be asking questions because it sounds disingenuous at best - I thought the changes (as recommended in the Hutton Report) would affect all PS pension schemes. I may be wrong...

I know - and it contradicts what Toady wrote in his letter to Bruneep. Who do I believe - the HR dept or Alex Salmond....

What's the general feeling among your colleagues? I was startled by how apathetic mine were about the issue. Fancy a ride on the 30th? 😉

My colleagues seem to be waking up to this Tory clusterf*ck, though some of the Unions are lamentable in their communication. The apathy over the recent changes to Ts&Cs was staggering.

30th is in the diary! 😉

[quote> http://www.metro.co.uk/news/867663-union-bosses-pensions-equal-to-members-pay
Sally Hunt on 126 grand a year [weeps].
I'm in higher education, member of the confederacy of dunces known as UCU. Hard to gauge a response to the pensions increases here - UCU is mad as hell but their membership is really uneven. My last school had me and two others as members out of 60 staff, but some others are 100% membership. Now at a new place so still taking the lie of the land. God knows what form a strike will take.