Date: Wed 28 November 2012

Scottish public service pensions should be managed in Scotland - UNISON

UNISON Scotland today warned the governments in Westminster and Holyrood not to play politics with Scottish public service pensions.

Scotland’s main public services union was responding to Finance Secretary John Swinney’s announcement in the Scottish Parliament today (Wednesday 28 Nov) on the Public Service Pensions Bill going through the Westminster Parliament.

Dave Watson, UNISON Scotland Head of Bargaining and Campaigns said:
“Public service pensions are too important to play politics with. Over a million Scots are relying on these pensions – which are hard-earned savings for income in retirement. At present Scottish public service pensions are designed and run in Scotland – and that is the way they should stay.

“It is very clear that the Bill going through the Westminster Parliament is effectively a Treasury power grab over public service pensions in Scotland which is totally unjustified.

“From a Scottish point of view the Public Service Pensions Bill will impact mainly on the design and effectiveness of the Scottish Local Government Pensions Schemes (LGPS). We have argued that MPs should not agree to this legislation unless it is amended to retain the independence of these excellent schemes.“

UNISON has called on the Scottish Government to demand a Legislative Consent Motion (Sewell Motion) to allow the independence of Scottish pension schemes to be retained. We have also called on MPs to amend the Bill at Westminster to achieve the same ends.

 Dave Watson added:
“The UK Government's approach also impacts on other Scottish pensions schemes including health. Workers in these schemes are still subject to the UK government’s unfair and punitive pensions tax and Treasury veto. We believe the Scottish government could still do more to minimise that damage here in Scotland and we have tabled detailed proposals with them about this."

Dave Watson concluded:
“If these two governments can manage to come to an agreement over a referendum on Scottish independence in 2014, they can surely come to a working arrangement which will retain the independence of well-designed and well-managed Scottish pension schemes on which over a million people are depending.”

ENDS 

For further information please contact:
Dave Watson, Head of Bargaining and Campaigns, UNISON Scotland, on 07958 122 409
Malcolm Burns, Communications Officer, UNISON Scotland, 0141 342 2877 or 078765 66978
Fiona Montgomery, Communications Officer, UNISON Scotland, 0141 342 2877 or 07508 876 995 

Notes for editors

1. UNISON is Scotland’s largest trade union representing over 160,000 members working mainly in the public sector in Scotland.

 2. The UK Government's Public Service Pensions Bill sets out how new public service schemes are created and prescribes the key elements of all schemes including governance and benefits.

 There are very significant implications for Scotland because primary pension legislation is a reserved issue. At present our schemes are covered by the UK Superannuation Act 1972. This is largely enabling legislation that allows the Scottish Parliament to design schemes that meet our requirements. In practice the NHS scheme closely follows England because changes to the scheme require Treasury approval. No such approval is required for the LGPS and that remains unchanged in this Bill.

 However, the Bill, for the first time, prescribes key elements of all schemes and that will apply to the LGPS. It is therefore LGPS members who will be most significantly impacted by the Bill.

 The main prescriptions include:

• A career average, not a final salary scheme. Revaluation percentages as specified by the Treasury.
• Retirement age linked to the state pension retirement age.
• A cost cap as defined by Treasury.
• Rules for governance and fund valuation.

All of these matters are currently decided in Scotland and therefore the Bill significantly undermines the current LGPS agreement. If the Bill goes through unamended the Scottish Parliament will be required to bring the LGPS into line on these points by April 2015. This will require an intensive period of negotiation on these points. None of these issues impacts directly on employee contributions, other than indirectly through the cost capping provisions.

Scottish Government officials have advised ministers that they must implement the UK legislation. However, UNISON has taken legal advice that this legislation requires the approval of the Scottish Parliament through a Legislative Consent Motion (Sewell convention).

We have written to John Swinney MSP, the Cabinet Secretary for Finance urging him to take this course of action. We have argued that Parliament should not agree to this legislation unless it is amended to retain the independence of the Scottish LGPS.

2. Our latest pensions bulletins deal with the Public Service Pensions Bill in more detail.

Scottish pensions Bulletin No 33 - Nov 2012 
http://www.unison-scotland.org.uk/pensions/scotpensionsbulletin33_nov12.pdf

Scottish pensions Bulletin No 32 - Oct 2012 
http://www.unison-scotland.org.uk/pensions/scotpensionsbulletin32_oct12.pdf

For further information on UNISON Scotland pension campaigns please visit www.unison-scotland.org.uk/pensions

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