Pensions Green Paper Briefing
January 2003
Introduction
This briefing paper examines the Government's
Green Paper on pensions entitled, 'Simplicity, security and
choice: working and saving for retirement' and how it impacts
of UNISON's pension policy. The Green Paper highlights that around
3million people are seriously under-saving for their retirement
with a further 5 to 10 million people who need to consider saving
more or working longer.
Although occupational and private pensions are
reserved matters there are issues of concern for the devolved
government in Scotland. The Scottish Executive is responsible
for the regulation of public sector pension schemes. These are
administered by the Scottish Public Pensions Agency and include
pension schemes for the NHS, teachers and local government workers
in Scotland.
Government Proposals
The Green Paper highlights a number of proposals
by the government on the reform of pensions.
These include:
- increasing the retirement age of public sector employees from
60 to 65 (for new employees from 2006),
- simplifying the tax system for pensions,
- reducing the red tape for occupational pension schemes,
- establishing an independent pensions commission to report
on how effectively the government's approach is developing,
- encourage pensioners to delay the take up of the state pension
until they are 70 years old, and
- encouraging people to save more.
The main ideas within the paper aim to encourage
workers to either save more or work longer to ensure that they
can build up a larger pension.
UNISON's Pension Policy
UNISON takes proper pension provision very seriously,
with considerable time and resources spent on negotiating, lobbying
and campaigning for:
- A decent Basic State Pension, including restoration of the
earnings link,
- Good employer pension schemes, and
- Defence of public service schemes in the face of outsourcing.
UNISON believes that pensions are a form of deferred
pay and that the state pension will not be enough.
It is vital that employers are be made to contribute
their fair share via an adequate occupational pension scheme.
Pension protection is still poor and UNISON continues
to fight for members to remain in good public service schemes
when they are transferred in and out of Public Service Organisations.
Employers still have too much power over company
pension schemes. A Maxwell-style robbery is still very much a
possibility. Surpluses in pension funds, supposedly reserved for
members, are still accessed readily by employers.
UNISON is campaigning for a majority of trustees
to be chosen by scheme members - and control the members' money
- and simplification of the Pensions Act to stop employer abuse.
Implications of the Green Paper
If the proposals of the Green Paper are to be
implemented then these will have a serious effect on future pension
provision including that of:
- The basic state pension,
- longer working age, and
- employer pension schemes.
The basic state pension
The government has indicated in the green paper
that it will not restore the earnings link for the state pension.
This is clearly against the policy objectives of UNISON. The green
paper also proposes to reward pensioners who defer their take
up of the state pension until they are 70 years old.
These two proposals will penalise those on lower
incomes that would not have any recourse to either secondary earnings
or a second pension.
Longer working age
The proposal to raise the retirement age for
public sector workers from 60 to 65 will have a disproportional
effect on manual and lower paid workers.
This may have an impact on groups of staff who
may be physically unable to extend delay their retirement date.
This may include ambulance crews who often retire early due to
the physical nature of their employment.
It also ignores the problems facing older workers
in retaining their jobs as well as those looking for new employment.
Age Concern have stated that there are not as many people in full-time
work at retirement age because they have been pushed into taking
incapacity benefit or going part-time by their employers.
Also, the UK already has the longest working
hours in Europe and by raising the retirement age, this will lead
to UK workers having the longest working life the EU.
Employer pension schemes
Although the green paper removes some barrier
to employers establishing an occupational pension scheme, it relies
on a voluntary approach.
There are no proposals in the green paper that
would help stop the decline of final salary schemes.
UNISON believe that there needs to be a partnership
between employers and employees, with an element of compulsion
to ensure that both partners contribute to a suitable pension
scheme.
Further proposals from UNISON would include an
end to the right of employers to modify or discontinue schemes/
contributions without restraint as well as flexible consultation
with trade unions and democratic control of funds.
The government's decision in their Green Paper
to give voluntarism one last chance is only postponing the day
that employers face an obligation to contribute to staff pensions.
Action for Branches
The government is consulting on this Green Paper
until 28th March 2003.
This briefing paper is intended to stimulate
debate about pension provision for members, and as such, all replies
will be welcome. It is also important for branches to be aware
of UNISON's pensions policy (see further information). Branches
could use any negotiations over flexible retirement dates as an
opportunity to promote UNISON's policy objectives.
UNISON headquarters are preparing campaign materials
on this issue.
Department of Works and Pensions:
http://www.dwp.gov.uk/
UNISON Proper Pensions Campaign
http://www.unison.org.uk/pay/pensions.asp
TUC Pensions information
http://www.tuc.org.uk/pensions/index.cfm
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