Strathclyde Pension Fund: Review of Admissions Policy

The UNISON Scotland Submission

To the Strathclyde Pension Fund Consultation: "Review of Admissions Policy"

October 2004

Introduction

This paper constitutes UNISON Scotland's response to the consultation by Strathclyde Pension Fund on their Review of Admissions Policy.

UNISON is Scotland's largest trade union representing around 150,000 members working in the public sector in Scotland, many of whom are members of Strathclyde Pension Fund.

UNISON Scotland welcomes the opportunity to respond to this consultation exercise.

Consultation Process

UNISON Scotland is concerned about the pace of the proposed policy change and the lack of time allowed for consultation.

The implementation date for the proposed change is set for 1^st January 2005, with the policy set for approval by the relevant sub-committee of Strathclyde Pension Fund on 25^th November 2004. However the consultation papers were not circulated until 30^th September 2004 with a deadline for responses set at 1^st November 2004. This allowed barely a month for consultation for organisations such as UNISON Scotland that would prefer a longer period to consult their membership on the proposed change.

Policy Change

Although UNISON Scotland would obviously be in favour of protecting the long-term viability of Strathclyde Pension Fund, there is a concern that the case has not been proven for a change in the admissions policy or that such a change should proceed at such an urgent pace.

UNISON Scotland is concerned about the impact the proposed new admissions policy would have on our members who are currently members of Strathclyde Pension Fund (SPF).

UNISON Scotland would prefer to see some clarification with regard to the issue of job transfers due to PPP schemes. The STUC/ Scottish Executive PPP Staffing Protocol highlights that, where possible, transferred staff should remain as members of their existing pension scheme through their new employer gaining admitted body status to the pension fund.

Although a bond or indemnity is required for the admission of ‘transferee' bodies , such as PPP schemes, there is a concern that any funding shortfall not covered by the bond would fall onto the awarding authority. Also, as the STUC/ Scottish Executive PPP Staffing Protocol and Best Value guidance highlight, any new recruits to the PPP workforce should access the same pension arrangements as transferred employees.

Therefore any council (or other existing employer) within Strathclyde Pension Fund who awards a contract or service to another organisation, and where this involves a transfer of staff, could find themselves not only liable for pension funding shortfalls of transferred staff but also for new recruits to the PPP workforce. UNISON Scotland is concerned that this situation is not clearly highlighted within the consultation paper.

This could lead to existing SPF employers refusing to act as a ‘guarantor' for any new organisations that take over the various public sector functions (i.e. new housing organisations which take over local authority housing stock and related staff).

If existing SPF employers refused to act as ‘guarantors' then there is a danger that existing individual members of the SPF could lose their entitlement to remain within the fund. UNISON Scotland would be concerned that staff who are currently carrying out duties in the public sector and through staff transfer find themselves employed by another body would be denied access to the pension fund.

There also seems to be some confusion as to whether each transfer would require both an indemnity bond from the new employing body as well as the former employer to act as ‘guarantor'. UNISON Scotland would prefer for this issue to be clarified and to know if there are guidelines in place or being developed to cover this. Without such clear-cut guidelines there is a concern that current employees of SPF employers would be unclear of the situation affecting their entitlement to remain within the pension fund in the event of their transfer to a new employer.

Conclusion

UNISON Scotland is concerned about not only the pace of change and the limited consultation period but also on the actual need for a change to the admissions policy. The consultation paper does not make the case strongly enough that such policy change is needed. There is a concern that existing SPF employers may not be fully aware of the risk involved in transferring staff while still being held responsible for any future pension liabilities. UNISON Scotland is also concerned that there appears to be no definitive guidelines on how transfers of staff (via PPP or a transfer of a council function - for instance housing stock transfer) will affect individual members of the SPF.

For further information please contact:

Matt Smith, Scottish Secretary
UNISON Scotland
UNISON House
14, West Campbell Street,
Glasgow G2 6RX
Tel 0845 355 0845 Fax 0141 342 2835
e-mail matt.smith@unison.co.uk