Friday, 22 November 2013

Employers and unions agree new pensions

Local authority employers and trade unions have reached agreement on a new design for the Local Government Pension Scheme in Scotland.

In a statement issued jointly by the Confederation of Scottish Local Authorities (CoSLA) and UNISON, the largest public sector trade union, the key changes to the pension schemes of 280,000 workers across Scotland are described as: a move from Final Salary to Career Average pensions; an increase in accrual rate from 1/60ths to 1/49ths; retaining existing ill health and death in service benefits; introducing a 50/50 option allowing employees to pay 50% of contributions for 50% benefits; introduction of an employers' cost cap mechanism to ensure the future affordability and sustainability of the scheme; and equality in partner pensions for co-habiting and civil partners as with married couples.

The joint statement explained, “The movement to a Career Average Valuation will ensure that those at the lowest end of the pay scale and particularly female employees will benefit from a fairer and sustainable pension.  The new scheme design will go a significant way to ensure that those employees can make a decent provision for their retirement.  CoSLA Leaders approved the new scheme design in September and UNISON has confirmed that [in a ballot of members] they received a 94-percent positive response to the new design.”

Cllr Kevin Keenan, CoSLA’s Finance Spokesman, said, “While we felt we already had a sustainable and fair Local Government Pension Scheme in Scotland, the reform process did offer an opportunity for local authorities as employers to ensure that the Scheme provided important support for employees at the lower end of the pay scale and reflects the unique demographics of our workforce whilst remaining affordable and sustainable.  The positive ballot result from the Trade Union side is a welcome confirmation that the new scheme design is a positive change and reflects a very constructive approach between all parties.”

Dave Watson, Scottish Organiser (Bargaining and Campaigns) at UNISON, added, “While the local government trade unions - UNISON, GMB, Unite and UCATT - regard the reform of the Scottish Local Government Pension Scheme as an unnecessary interference by the UK Government in the operation of a pension scheme that had been updated as recently as April 2009, our approach has been to minimise the impact of the changes imposed by the UK Government and maintain the main elements of the uniquely Scottish approach.

“The main aim was to protect and improve pension benefits for the majority of members without increasing contributions.  Such an increase would simply drive members away from pension provision at a time of pay cuts and other economic pressure.

“We hope the new scheme will attract new members, particularly women and those at the lower end of the pay scale who are most likely to suffer by not having a secure pension in retirement.  In doing so we believe we have a sustainable and affordable scheme for the longer term.”

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