Thursday 7 October 2010

Hutton: Work for longer, pay more but receive less pension

THE NUT NATIONAL EXECUTIVE met on the day that the Hutton Commission released its first report. Our message to the Government must be clear - we are not going to accept any worsening of our pensions.

Firm recommendations have not yet been made - but the threats to our pay and pensions are clear:
Across Europe, Governments are pushing for increased retirement ages - so that we have to work longer, then have fewer years left to draw our pension. Fearful of the opposition this might meet, Hutton has not recommended any specific increase. However, this will be the Government’s plan if we don’t act.
Hutton’s ‘short-term’ recommendation is that we pay a higher proportion of our pay towards our pension - i.e. we take a pay cut instead of just a pay freeze!

But Hutton admits that expenditure on pensions “will remain close to current levels” based on existing agreements. In other words, it’s not that our pensions have suddenly become unaffordable. No, the hole in Government finances is down to the huge cost of paying off the bankers’ ‘gambling debts’. Our higher contributions wouldn’t be paying for our pensions - but to pay off their debts.

We must not let ourselves be robbed in the same way as many private sector employees who have seen their employers renege on pension agreements. Instead of allowing a ‘race to the bottom’ on cutting pensions, we have to stand together and demand decent pensions for all.
The Government has already announced that it will now calculate pension changes using the lower-rated Consumer Price Index (CPI) instead of the RPI. This change alone will cost a teacher retiring on a £10,000 pension over £35,000 over the course of the average retirement. This is just the start.

Hutton says he is worried about the ‘unfairness’ of the teachers’ ‘final-salary’ pension schemes - which benefit staff who are promoted towards the end of their careers - and wants to examine ‘career average’ schemes instead. If it was just a matter of making technical changes to recalculate pension payouts, then the pros and cons could be examined. But ‘career-average’ salaries need to be based on a realistic index-linking to take account of inflation throughout a working lifetime - not the CPI. So, if it’s not done correctly, a ‘career average’ could easily just mean reduced pensions in retirement.

He also complains that our pensions are “a barrier to non-public service providers ... and innovation in public service delivery”. In short, privateers want to pay less! Another reason to oppose Academies.
Hutton’s caution, in not making firm proposals, shows that he, and the Coalition, are not confident that they can force through these threats. They know that the last Government was forced to retreat by the threat of united trade union action - and we must make clear that we are ready to fight again!

If the Government detects any sign of weakness, they will push ahead with their pension attacks. We have to build our own ‘coalition’ of opposition - and prepare joint industrial action to defend pensions.

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