Thursday 19 May 2011

Career Average Catastrophe - VOTE YES!

The Guardian has printed shocking details of a leaked document revealing the truth about the 'negotiations' that the Government is offering public sector unions over the future of our pensions.

The key phrase in this leak is as follows:
"The models in the paper suggest that the [accrual rate] should rise to either one 80th, 90th or 100th, of the salary accrued for each year worked. It means some public sector workers would have to work ten years longer to get half of their average salary".

Hidden by technicalities, this translates into a further vicious assault on pensions. It would mean that the losses from the NUT pensions loss calculator – shocking enough for most teachers – are a significant underestimate of what is now threatened.

For now, if you manage to have pensionable work for 40 years, on the 1/80 accrual rate applying to most teachers, you can retire with 40/80 = half your final salary.

A switch to a career-average scheme on the same accrual rate would mean that you would only get a much lower career-average salary based pension in return. Figures given to the National Executive last year suggested that a career-average pension linked to CPI indexation might yield only around 60% of a final salary pension - a massive cut!

This could be offset by improving the accrual rate – so, for example, the civil service Nuvos scheme has an accrual rate of 1/43. Even this might not be good enough - figures given to the National Executive suggested a rate of 1/37 might be needed to avoid pension cuts.

This would have been the kind of approach that union negotiators would have been expecting - if not 1/37 or 1/43 perhaps at least 1/50 or 1/60 as a starting-point for negotiations on moving to career-averages. Instead, the Con-Dems want to make accrual rates worse, not better!

An accrual rate of 1/100 would be a double whammy of a lower career-average salary and a worse accrual rate. If 1/37 is needed to protect pensions under a career-average scheme, 1/100 would represent a pensions slaughter. Of course, they'll also be expecting us to work to 67 or 68 to get even this massively reduced pension!

Many teachers may not follow the technicalities but they certainly need to understand what it would mean - a further massive cut to the value of our pensions. It could mean pensions for future teachers being slashed to half of what we expect to retire with at present.

The Con-Dems are clearly out to smash public sector pensions. We are in for a serious struggle - and it is one that we have to win. But we can!

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