Local government pensions, unions nd scaremongering

Jessikita1983

Hello,

can someone point me in the direction of some unbiased information with regard to the proposed changes to the local government pension scheme?

One of the unions in my workplace is distributing some literature making all kinds of allegations. Basically it says I will have to double my contribution to 13% and receive less benefits from it.

I am looking for an unbiased, objective and truthful account of the changes so I can make some decisions.

I earn £29236 and pay 6.5% of my salary before tax.

Pixieboy

The Unions really aren't doing their members any favours with that kind of talk...
There are two sets of proposals that have been put forward at present.
One from the Local Government Group, which is available here http://www.lge.gov.uk/lge/core/page.do?pageId=13667990
The other from the Department for Communities and Local Government, which is out for consultation and is available here http://www.communities.gov.uk/news/localgovernment/2004263
Neither is suggesting contribution levels anything like that.
Both are seeking to address the cost saving by end of 2014/15 issue though, in part by an increase in contribution rates for those on £15k FTE or more.
What the new scheme from 2015 will look like/cost is too early to say at the moment, although the Hutton recommendations give clear signposts http://www.hm-treasury.gov.uk/indreview_johnhutton_pensions.htm

Hope this helps.

vax2002

Basically, when Gordon Brown wrote off African debt, that was your pension money they had invested in bonds secured on the loan.
So your money no longer exists, they just have to work out a scheme to fiddle you out of it yet, but here it comes.

Jessikita1983

Pixieboy - Many thanks. I will have a good read tomorrow (bit tired to take it all in now). When I have all the information, I will make an informed decision. Thanks again.

General note on the unions: I like to know the true facts before I make a decision. And the unions are distributing misleading information to everyone across the council. In the least patronising way possible, some people are not financially switched on and are believing everything they say.

Without doing proper research I couldn't say for definite, but I suspect even after the changes it may remain one of the better pension schemes around. But it is not being "marketed" that way by the unions at all. Based on this information, the unions are asking people to lose a days pay striking over it.

atush

From what I understand of the possible hanges, your contributions will be going up. But you will still get a better pension than those who would contribut the same (with a matching employer's contribution) in the private sector. And given that is your best alternative, it is still a good pension.

The unions in this country get away with things they would not be able to in the USA, incl lying to their members. And remember, while they do so, they themselves are paid and are collecting those gold (now proposed silver plated) pensions. I can assure you, that NO UNION employees will be opting out of their schemes.

CLAPTON

can you post up a scan of the union info

Jessikita1983

Hi Clapton, I am off today, but working tomorrow. I don't have a scanner can you upload pictures? I could photograph it.

Jessikita1983

http://www.unison.org.uk/pensions/protectour.asp

Here is a link, this is the same information as what is on the leaflet.

The leaflet does waffle on a bit more about going on strike etc. But most of my colleague have rightly or wrongly read the information as I can't afford 13%!

CLAPTON

it seems to be saying you will pay 3% more than now; presumably to pay about 6-7% so that will be 9-10%?

jem16

Jessikita1983 wrote: »

One of the unions in my workplace is distributing some literature making all kinds of allegations. Basically it says I will have to double my contribution to 13% and receive less benefits from it.

Basically the unions are distributing literature that is factually correct but is obviously being delivered in such a way as to make their case for strike action stronger.

All the literature I have seen say that contributions are set to rise by 50% over the next 3 years. On a 6.5% contribution that would see a rise of approximately 3% to around 9.5% and the link you gave to Unison confirms that so I don't know how you and your colleagues translate that to double. Of course what it doesn't say is what you would have to pay if it was a money purchase scheme so that you could compare.

The unions are also strongly promoting the RPI to CPI change which will result in less pension each year. However they don't say that it's not only public sector pensions that are affected.

They are also strongly pushing the change in retiral age to fall in line with the state pension age. Again they don't mention that any accrued benefits will still retain the original retiral age.

Another point being strongly pushed is that the accrual rate for the proposed CARE scheme hasn't been set ( not sure if it has or not ) and that it could be much less than the current 1/60ths.

They also mention a comparison between the private sector and public sector pensions by giving the pension of a FTSE 100 director and comparing it against the average public sector pension. Why not compare an average private sector with an average public sector pension and their contributions. That would have more meaning.

So the unions are not being untruthful but they are manipulating the facts to make their case look better.

The bottom line is that your pension will cost more and you probably will get less later on but it is still much better than any alternative.

Jessikita1983

jem16 wrote: »

Basically the unions are distributing literature that is factually correct but is obviously being delivered in such a way as to make their case for strike action stronger.

All the literature I have seen say that contributions are set to rise by 50% over the next 3 years. On a 6.5% contribution that would see a rise of approximately 3% to around 9.5% and the link you gave to Unison confirms that so I don't know how you and your colleagues translate that to double. Of course what it doesn't say is what you would have to pay if it was a money purchase scheme so that you could compare.

The unions are also strongly promoting the RPI to CPI change which will result in less pension each year. However they don't say that it's not only public sector pensions that are affected.

They are also strongly pushing the change in retiral age to fall in line with the state pension age. Again they don't mention that any accrued benefits will still retain the original retiral age.

Another point being strongly pushed is that the accrual rate for the proposed CARE scheme hasn't been set ( not sure if it has or not ) and that it could be much less than the current 1/60ths.

They also mention a comparison between the private sector and public sector pensions by giving the pension of a FTSE 100 director and comparing it against the average public sector pension. Why not compare an average private sector with an average public sector pension and their contributions. That would have more meaning.

So the unions are not being untruthful but they are manipulating the facts to make their case look better.

The bottom line is that your pension will cost more and you probably will get less later on but it is still much better than any alternative.

Jem16 - Many thanks for all your clarification. I know they are not being untruthful but I feel they are manipulating the figures.

The literature at my workplace does say 50% sorry, misreading from me.

Across my teams we have varying levels of ability and astuteness (as you get everywhere) and very differing opinions on unions etc, so there are various interpretations and opinions floating around.

From purely my point of view, I don't know if I can afford to contribute 9.5% of my salary. I accept for a lot my salary is high, but of course I have taken on a mortgage etc. I do not have any debts other than my mortgage, and a post 1998 pre 2006 student loan which they are rightly so deducting £113 a month. But I am the main breadwinner in my household.

I will await the final decision and a letter from the LGPS when it is all told/said and done and consider my options from there.

I know everyone is in the same boat and I am lucky to be in such a scheme, so please forgive this small self indulgent whinge, but being only 28 it is very hard to " do the right thing" with regard to pensions and the next 40 years I have left at work. I suppose all I can do is the best with the information I have at the time.