Local Government: Call for YES vote to new Pension Scheme

by Chris Bartter

All UNISON members who are conditioned to the Local Government Pension Scheme (LGPS) are to be balloted in the next few weeks on the introduction of a new scheme from April 2009.

And UNISON negotiators are recommending a YES vote for what is seen as a significantly improved scheme, negotiated during a period of increasing pressure on all pension schemes.

The new scheme, which applies to all members of the LGPS, including members in police, higher and further education, the careers service, Scottish Water and the community and voluntary sector, is retained as a final salary scheme, improves on some benefits and incorporates protections for existing members where needed.

There is Rule of 85 protection to 2020 and a better deal than the England and Wales scheme. Graduated contributions are particularly welcomed.

UNISON Scottish Convenor Mike Kirby says, "This is an excellent result for UNISON and its members and has been delivered by the solid support for industrial action that UNISON members showed in the dispute in 2006 and by the professional expertise of the union in leading the negotiations for the new scheme."

The new scheme is still a final salary scheme at a time when similar schemes are being closed to new entrants or scrapped altogether. The rate at which people's pension will grow, however, is significantly improved. Your pension will now accrue by 1/60th of your final salary every year instead of the current 1/80th.

The current automatic 3/80ths lump sum is changed to a more flexible system where you can transfer as much or as little of your annual pension to create a lump sum.

Every £1 of pension transferred adds £12 to your lump sum and you can transfer up to 25% of your pension. Death in Service benefit increases from two to three times final salary.

Partner pensions will now be available to unmarried partners who co-habit, as well as those who are married and those in civil partnerships. And there is increased flexibility allowing you to draw all or part of your pension benefits without having to retire completely.

Contributions to the scheme from members are scheduled to rise slightly on average (from 6% to 6.3%), but they will now be on a tiered rate so that pension contributions increase as salary increases.

Lower paid staff - up to 60% of local government who earn less than £23,600 in fact - will end up paying less than they do at present. The tiered contributions work like income tax, with the lower rates continuing to be taken from the lower elements of your salary, ie everyone will pay 5.5% on the first £18K a year they earn.

Mike Kirby, is clear however, that we haven't got everything we wanted. "We wanted to have ill-health retirement provisions that are more flexible than we were able to," he said.

"Because of the legal stipulations of the UK Finance Act, we had to agree limited improvements here. But we have, we think, negotiated the best scheme we can with two scheme provisions for ill-health retirement, and a third discretionary provision outside the scheme."

There will also be transitional protection for any current members who would be better off under the current arrangements. How will you transfer? All members will transfer to the new scheme as at 1 April 2009, and start to accrue pension benefits at the enhanced rate. Their existing pensions will be retained, and at retirement, two pension calculations will be carried out - one for each scheme.

This is an important new pension scheme for LGPS members. It protects past benefits, and builds in new benefits, all for a fairer contribution related to members' earnings.

At a time when quality pension schemes are under attack from employers there can be few better examples of the benefits of UNISON membership.

To maximise this recruitment opportunity the ballot envelope will include a 'recruit a friend' leaflet. Branches are also asked to support this initiative with recruitment activity around the ballot and further copies of the leaflet will be available from UNISON House.

For detailed information on the agreement please check out the UNISONScotland website at www.unison-scotland.org.uk/pensions

Ballot

The ballot is due to start around 3rd and be completed by 21 March. If a UNISON member who works beside you has not received a ballot paper, or you have lost your paper, please contact the ballot helpline by 18 March 2008. Phone 0131 226 0096 or email membershipteamscotland@unison.co.uk.

headlines . top