June 2011 Briefing for Activists

How our Pensions are reported

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, Governor, Bank of England

This is the scary position used to justify public service cuts Public Sector Debt

In 2007 the UK had 2 nd lowest debt in the G7. Then we bailed out the banks … The Real Picture

Lord Hutton says we should … Pay More Work Longer Get Less

Paying More … 50% More!  Government cuts to funding equate to just over a 3% contribution increase on average for members.  If you pay 6%, a 3% addition is really a 50% increase!  Increases to be phased in 40% in % in % in

Contribution Increases  This is a tax to repay debts that were used to bail out the banks  None of the money will go into the schemes  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 & prepare for a ballot for industrial action

Working Longer …  From November 2018 the State Pension Age will be 65 for both men & women  For those now between 42 to around 57 it will be 66 (April 2020)  For those between 34 and 42 it will be 67 ( )  For those now 34 or younger it will be 68 ( )

Getting Less …  The Government decided that public service pensions will increase by Consumer Price Index (CPI) instead of Retail Price Index (RPI) from April 2011  CPI is on average 0.7% per year lower than RPI  Lord Hutton says this represents a 15% cut in benefits  A member receiving an average public service pension of £7800pa will be £117 worse off this year

An end to Final Salary schemes?  Hutton stated 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  Crucially he has stated that each year’s pensionable pay should increase in line with increases in average earnings up to when you leave or retire

What is a Career Average scheme?  This is a scheme that bases benefits on average earnings over a scheme membership rather than final salary  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 and UNISON is not necessarily against a CARE scheme as long as it’s not a clear cost-cutting exercise

Our Campaign Objectives Prepare members to resist attacks on public sector pensions Support negotiators to achieve the best outcome possible & prepare for industrial action Make sure that UNISON members gain a greater understanding of public sector pension schemes – remove the pension jargon fog

Campaign Structure  National Project Team  Regional lead officers & organising teams, Regional lay member structures  Branches to have Pension Champions & Contacts – in regional & national networks

Pension Champions & Contacts Pension Champions Make sure union briefings & information on changes to public sector pensions are understood by the branch, workplace pension contacts & members. They will take a lead role in supporting contacts, developing local campaign initiatives, making sure that the branch & 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 & the campaign/negotiators. Talk to & recruit non members.

What Are The Key Issues We Face?  Budget measures 2011 – change to State Pension flat rate of £140  Change to pension increase calculations – RPI/CPI  Scheme contribution increases  Retirement age increases  Benefit changes to career average  Fair Deal – TUPE transfers and pensions and …  Lack of public sympathy!

An end to Fair Deal - making it cheaper to privatise  Fair Deal is the agreement that enable TUPE transferred staff from public services to either remain their pension scheme or be provided with a “certified” broadly comparable scheme  Government is looking to scrap Fair Deal because of the relative cost to companies bidding for public service contracts  This would leave TUPE transferred staff at the pensions mercy of private contractors

Hutton - Other issues  Increasing the share of that cost that scheme members pay, while limiting employers’ contributions  A complete overhaul of the State Pension  New governance in all schemes – national bodies  Representation on LGPS investment boards  Incentives to merge LGPS funds  Privatisation of scheme administration

Where can you find everything? National Campaign Region Campaign Advice on Pensions

The Campaign Needs You Pension Champions in every Branch Pension Contacts in every Workplace

Government Threats... ”The first explicit acknowledgment by a coalition minister that the government could legislate to prevent widespread strikes.”

June 30th On Thursday, June 30, nearly a million workers could be on strike together, from the PCS, UCU, NUT and ATL unions. This includes teachers and education workers in schools, colleges and universities.

Talks Could Trigger Strikes Industrial action ballot will be triggered if talks breakdown on 28 th June. We are on the road to sustained industrial action this Autumn.

The Government says we should … Pay 50% More Work Years Longer Get 50% Less We say … No, No, No