Public sector pension separation


Is this a Civil Service or LGPS pig?

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.

We made a quick note about this last week in our round up post and were pleased to see a very smart reply from Will who said:

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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5 Comments on “Public sector pension separation”

  1. Big K Says:

    The timing of the strike seems daft as well. The government has made proposed changes to the scheme and there is a consultation running until January. So why strike now when there is still room for negotiation and a chance to influence the outcome. All striking does is push the government into a corner so they can not afford to back down as it will make them look week. Let’s save the strike threat until the new year when it will be closer to 2012 elections and therefore could have more of an impact.


  2. Local government employers *and* unions have been consistent in arguing the local government pension scheme should be treated differently from the unfunded public sector schemes, so I’m not sure the LGPS is being sacrificed on the alter of worker unity.

    Re daft timing of the strike. Balloting members is such a lengthy process, the unions started early to make sure the strike was on the right side of the law and the right side of the government’s deadline for negotiations. Ministers played a very deft hand by unveiling their more generous offer the day before Unison’s strike ballot result – in which just 30% of their local government membership had taken part.

    Local government employers, unions & DCLG have quite a lot of leeway in designing a future scheme to work for local government (http://www.lgcplus.com/topics/pensions/union-warns-pension-membership-could-halve/5037947.article – subs barrier). The major gripe for unions is that ministers are still to be persuaded that next year’s contribution increase to save councils/taxpayers £900m is unnecessary.

  3. Pete McClymont Says:

    (Own views; almost certainly not those of my employer.)

    >Some civil servants pay as little as 1.5%

    Golly! I’d like to know who they are because I paid considerably more than that when I was last in the civil service (2004) shortly after the scheme went through a huge change.

    I’m sorry to disagree and sorry to sound like some old militant. The pension issue has such an obvious political dimension to it that, irrespective of the differences in the schemes, it makes perfect sense to co-ordinate action across the public sector.

    The coalition has been spoiling for a fight from day one. And, probably some of the more bolshie union leaders have too.

    I don’t think losing in the detail in the dispute really matters. Try explaining the differences to your non-public sector neighbour.

    As for “The Government and the Unions have been involved in the negotiations…” I’m not sure what negotiations you refer to. As far as I can tell there have been no substantive negotiations just a lot of meetings dancing around the government’s inflexible instructions and posturing in the press.

    >So why strike now when there is still room for negotiation and a chance to influence the outcome.

    The government moved an inch only in the face of proposed strike action. It might move a bit more (or not). It won’t negotiate in good faith if it thinks the pressure’s off or if we go “on strike” for 15 minutes.

  4. VS Says:

    Also, I would add that the strike on the 30th November has to take place then because – due to the Tory anti-union laws – as far as I understand, a strike ballot can only remain valid if action is taken between 7 & 28 days after notification of the result is sent out. The very strict laws the Tories have brought in governing unions [probably amongst the strictest in the democratic world and in violation of some ILO conventions] have actually dictated the timing of this. The Unison ballot would not remain ‘live’ if Unison didn’t take action on the 30th.

    In terms of the local gov’t/civil service pension distinction, the danger of reaching a separate agreement is that different groups of workers can then be picked off one-by-one. We are already under rhetorical attack because people on the right are effectively saying “Private sector workers tend to get worse pensions so LG workers need to be levelled down”. If civil servants got levelled down, then the next time around they would come for us, saying, “Local government workers are getting a better deal than the civil service, we need to level them down”.


  5. […] while back a colleague put forward an argument that the difficulty with this strike from a Local Government […]


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