Negotiators from GMB, UNISON and Unite accept plans – now it’s up to the members
It follows five months of negotiations in the wake of the mass strike on pensions in November 2011 (pictured: N30 march in Sheffield)
Senior representatives from the GMB, UNISON and Unite met with the Local Government Association (LGA) to agree a deal that will include no contribution increases for 90% of scheme members, an improved accrual rate, a conversion to career average schemes and linking the retirement age to the state retirement age.
The unions say members will be consulted about the proposals, with the government hoping to implement the changes in the autumn.
UNISON’s Heather Wakefield said: “These negotiations have been long and tough and have taken place in a demanding political and economic climate.
“The process has shown that UNISON, the LGA and the other local government unions can work productively together in the best interests of LGPS members and potential members.
“LGPS 2014 is a sustainable, defined benefit scheme, which is designed to protect existing members and be affordable for the low paid and part-time workers who are its majority. Under exacting circumstances, we have achieved the best possible outcome.”
The GMB’s Brian Strutton said: “GMB members in the local government pension scheme will be relieved that at long last the uncertainty is over and they are able to see the future proposals for their pension scheme.
“Jointly negotiated by employers and unions and ratified by government, I believe the proposals strike a fair balance between all the conflicting interests we have had to take into account.
“Most importantly I believe the proposals lay the foundation for continued sustainability of the LGPS, which government’s original proposals would not have done.
“In reaching this deal there have had to be compromises that will affect individuals differently, that’s why, after a period of briefing and consultation, GMB will formally ballot members on this joint offer so that they can decide whether or not it is acceptable”.
The last valuation of the LGPS put its assets at £140bn, making it one of the largest institutional investors in the UK.
Unite’s Peter Allenson said: “We re-entered negotiations to ensure that we achieve the best outcome for LGPS members current and future within the terms of reference of the discussions
“This has been a real negotiation between the trade unions and employers and it is right that our members should now vote on whether to accept or reject the proposals.”
The government is hoping union members – and the LGA, which is also consulting its members in local authorities in England and Wales – will agree the deal as it reduces the chance of strike action.
The government still faces opposition to its plans in the education, civil service and health sectors.
Pensions for local government workers in Scotland are subject to separate negotiations.
The main provisions of the proposed LGPS 2014 are:
1 A Career Average Revalued Earnings (CARE) scheme using CPI as the revaluation factor (the current scheme is a final salary scheme).
2 The accrual rate would be 1/49th (the current scheme is 1/60th).
3 There would be no normal scheme pension age, instead each member’s Normal Pension Age (NPA) would be their State Pension Age (the current scheme has an NPA of 65).
4 Average member contributions to the scheme would be 6.5% (same as the current scheme) with the rate determined on actual pay (the current scheme determines part-time contribution rates on full time equivalent pay). While there would be no change to average member contributions, the lowest paid would pay the same or less and the highest paid would pay higher contributions on a more progressive scale after tax relief.
5 Members who have already or are considering opting out of the scheme could instead elect to pay half contributions for half the pension, while still retaining the full value of other benefits. This is known as the 50/50 option (the current scheme has no such flexible option).
6 For current scheme members, benefits for service prior to 1st April are protected, including remaining ‘Rule of 85’ protection. Protected past service continues to be based on final salary and current NPA.
7 Where scheme members are outsourced they will be able to stay in the scheme on first and subsequent transfers (currently this is a choice for the new employer).
All other terms remain as in the current scheme. Future scheme costs will be monitored and controlled to ensure stability and affordability of the LGPS. Further details on cost management and scheme governance will be released once the ongoing discussions in the next part of the LGPS 2014 project are complete.
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