UNISON Scotland New Scottish LGPS Consultation Paper

UNISON Scotland The story so far Consultation Paper released July 2007 Developed by Scottish Local Government Pensions Advisory Group (SLOGPAG) Scottish Government COSLA Trades Union Closing date 31 st October 2007

UNISON Scotland Key issues – broad agreement Subject to final cost package Case for reform Final salary scheme Accrual rate – 60ths instead of 80ths plus 3/80ths lump sum Death in service grant increased to 3 years Partners pensions including cohabitees Flexible retirement Equality impact

UNISON Scotland Key issues – Ill health Current provision – permanent incapacity in job or comparable New provisions – broad agreement 1.No reasonable prospect of gainful employment by 65 2.Unlikely do gainful employment in reasonable period (3-5yrs) TU side 3 rd tier – gainful employment shorter period. Payment equal to accrued pension until secure employment. Pension protection extended to ill health.

UNISON Scotland Key issues - Contributions Working assumption - average 6.3% Tiered contribution rates like tax mechanism (E&W banded) Preferred number of tiers to be agreed. Illustrative examples in consultation – 3, 5, 7 tiers Employer contributions meet the balance

UNISON Scotland Key issues – cost sharing & governance Employers want 2:1 ratio, employer to employee contributions e.g. total cost 18.9% payroll – employee pay 6.3% Excludes investment risk and past deficits Probably reasonable as approximate guide Mechanism for review – trigger if costs shift significantly Governance proposals Cost sharing means members entitled to a greater say Options from 50% trustees to improved consultation

UNISON Scotland Key Issues – Transition arrangements Benefits better in new scheme. Options for transition Simplest - all service is transferred and new benefits apply Year for year would incur significant cost Transfer value would reduce years of pensionable service Alternative – two calculations, pre and post 2009 Neither impact on ability commute into lump sum

UNISON Scotland Next Steps July – Oct 2007Consultation Exercise 31 Oct 2007Deadline for responses to this consultation Nov 2007Consideration of comments received from consultation exercise and decisions to be made on new scheme outline Dec Feb 2008 Consultation on draft regulations for the new scheme April 2008Regulations to be laid in the Scottish Parliament April 2009Regulations governing the new scheme takes full effect UNISON members ballot when final package agreed. Probably early in 2008.