Public sector pension separation
We haven’t written about the Local Government Pension Scheme for a while but since we last took a stab at joining the intelligent debate about it the Government and the Unions have been doing their best to do the opposite and thwart intelligent debate.
I also think that as a LGPS member that it is problematic lashing ourselves to the mast of pensions campaigns of Civil Servants and Teachers. The public do not know that our scheme is funded and I’m afraid we will go down with ship on this one.
I’m also concerned that there might be a determination amongst some in the unions and their political supporters to give the Government a bloody nose on this motivated by matters other than the pensions issue. I think Unison members should be wary of being used as a tool for political ends.
This will be a short post so we’ll stick with the first paragraph of Will’s response (I’m assuming that we’ll have plenty of chances to discuss this further over the coming weeks).
Without being too parochial I do fear that the across the board public sector pension strike will not take due account of the differences between the sectors. In the Local Government Scheme we pay between 5.5% and 7.5% of our salaries into the scheme; our employers also make a contribution (around 10% I think) and the scheme is, basically fully funded although some funds are running deficits at the moment.
In the civil service (for example) there is no pension fund and the contributions are much smaller.
Some civil servants pay as little as 1.5%. Thus a 3.2% increase in their contributions (A 200%+ increase btw) still only leaves their contribution at 4.7%. If the same is done for the Local Government scheme we’ll be paying up to 10.7% (although it’s around a lesser 50% increase to our contributions). I might be looking at this very narrowly but that doesn’t seem fair; I don’t particularly want to pick on the civil servant’s pensions but equally I’m not sure I’d want to go on strike to protect their treatment which is much better than ours.
Likewise, the LGPS is funded.
We know exactly (well, the actuary will provide us with a vague range!) how much money is needed to make the scheme pay out the right amount and therefore adjust our contributions accordingly. The civil service scheme (sorry to continue picking on them) is just a commitment to pay from Government coffers in the future.
The debate therefore has to be different as the schemes are different.
The Government and the Unions have been involved in the negotiations and it is in both of their interests to keep all the schemes lumped into one debate. In my view this is a mistake and the subtlety of the different schemes will get lost as we all go on strike. I don’t want to engage in ‘beggar my neighbour’ but it also seems mightily unfair that we’re all being given the same treatment when our starting points are so radically different.
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