Tuesday, 3 January 2012
Total Cost of the Government's Attack on Teachers' Pensions
Steve Cushion, of the London Retired Members’ Branch of the UCU has circulated the following calculations to outline how badly we would be hit if unions accepted the Government's 'offer':
If we were to accept the government's latest offer on "reform" of the Teachers' Pension Scheme, the average scheme member would be £93,000 worse off, while a teacher with 40 years service would be nearly £200,000 out of pocket.
The increased contribution from 6.4% to 9.6%, an average annual contribution increase of £1239, would leave the average teacher £18,500 worse off after 15 years of service. Meanwhile the employers' contribution remains capped at 14%. The maximum contributory service of 40 years would result in increased contributions of £50,000.
As a result of the proposed increase in normal pension age from 65 to 68, the average member would lose three years pension at £11,759 per year. This would leave a lecturer retiring after the average service of 15 years £35,000 worse off, while one retiring after the maximum pensionable service of 40 years would be £90,000 worse off.
As a result of the proposed change from Final Salary to Career Average (CARE), a lecturer retiring after the average service of 15 years would be £22,000 worse off, while one retiring after the maximum pensionable service of 40 years would be £3,000 worse off . This proposal is based on adding together 1/57th of each years' actual salary, enhanced by the Consumer Price Index (CPI) with an additional 1.6% as opposed to the current system of taking 1/60th of the final salary. It does not affect very long service members as badly as those under 30 year's service, but everyone loses.
It is perfectly possible to negotiate a CARE scheme that does not result in members losing money, it all depends on the accrual rate. In order to achieve the current average pension of £11,759, based on the current average salary of £38,737 after 15 years of service, the accrual factor would have to be at least 1/50.
The change from RPI to CPI in the calculation of the indexation of pensions is not compensated the addition of 1.6% to CPI. This leaves all pensioners, including current pensioners worse off. Thus the average lecturer retiring after 15 years' service would be £18,500 worse off, while one retiring after the maximum pensionable service of 40 years would be £54,650 worse off. This applies to current as well as future pensioners and so retired members should be included in any ballot on acceptance or rejection of the government's so-called reforms.
The full calculations are available at
http://www.ucu-retired-london.org.uk/pdf/pension-report.pdf
"Any increase in contributions from members will not aid their retirement; they will raise funds for the Treasury. This is simply a tax on public sector workers".
Wednesday, 28 December 2011
Pensions - Emergency Conference on January 7
Organising Conference Saturday: Friends Meeting House
(opp. Euston Station) 7th January 2012
11am – 4pm
11am – 4pm
Chair: Janice Godrich PCS President
Speakers: Mark Serwotka PCS General Secretary
John McDonnell MP
Kevin Courtney DGS NUT (personal capacity)
Roger Bannister UNISON NEC (personal capacity)
Mark Campbell UCU NEC (personal capacity)
Zita Holbourne BARAC
Kevin Donnelly Unite United Left
Monday, 26 December 2011
What the pensions 'offer' meant: - pay more, get less, retire older
The NASUWT website contains a link to the ‘offer’ that was presented to the education unions before Christmas – and that both the NUT and NASUWT refused to sign. You can read it for yourself on:
I am sure that NUT and NASUWT pensions experts will be able to provide teachers with some precise modelling to update the 'pensions calculators' and to rebuff the false claims that the Government have been making. For now, this is what I think the different clauses in the 'Heads of Agreement' meant:
1 i) Unions must agree to no more strike action while the ‘deal’ is being finalised = AGREE TO GIVE-UP THE WEAPON THAT REALLY THREATENS US, and
ii) If you want a better accrual rate (i.e a bigger amount set aside each year to improve pension payouts), you’ll have to pay for it by a worse indexation rate (cutting pension payouts), because we’re not putting any more money into the scheme (see 3 below) = THERE IS NO MORE MONEY ON THE TABLE SO THERE CAN BE NO REAL CONCESSIONS.
2a. The final-salary scheme will be replaced by a career-average-scheme. Because of the way that career-average schemes work, this change will mean a much smaller pension unless the new ‘accrual rate’ is considerably better than the 1/60 rate that applies in the existing final-salary scheme for new entrants (for example, the Nuvos career-average scheme negotiated in 2006 for the civil service has a much better rate of 1/43) ...
b. ... but they only propose a marginal improvement to a rate of 1/57. A full calculation and modelling needs to be done to show exactly how much pensions would be cut as a result (and should have been done before any union agreed) but it = WE GET LESS PENSION.
c. Career-averages have to be linked to some kind of indexation to bring past salaries in line with today’s prices. In November, the Government were proposing the link was with average earnings. Now they have changed that to CPI + 1.6% – and they have also calculated that this would mean a cut in scheme costs. i.e. = WE GET LESS PENSION.
d. Normal Pension Age will equal the State Pension Age = WE RETIRE OLDER.
This is worse than was on offer in November because Osborne announced in his Autumn Statement that the increase in State Pension Age will now hit more workers. Instead of having to be born after 5 April 1969 to see your State Pension Age rise to 67, now anyone born after 6 April 1961 will now not get to retire on their full pension until they are 67 or older. For younger workers, it will be 68. The Government wants to increase this even further beyond 68 in future. Negotiators had been discussing if a deal could be reached that would set teachers’ pension ages beneath the State Pension Age. In December, the Government took any such possible compromise off the table.
e. Pensions in payment to increase in line with the CPI = WE GET LESS PENSION. The NUT will be appealing against the court ruling that the Government was justified in switching from the higher RPI to the lower CPI Index but, if the courts again find against us, this will mean around a 15% cut in pensions paid out over retirement.
f. Benefits earned in deferment to increase in line with CPI, also = WE GET LESS PENSION
g. Average member contributions of 9.6% = WE PAY MORE, while our real pay is cut again. These are the same pay cuts that have been displayed on the NUT pensions calculator for some time. The increases will be phased in from April 2012, the full impact being in place from April 2014. For a UPS3 teacher in Inner London, they mean a £48 monthly pay cut in 2012 (£30 in England/Wales), and a £123 monthly cut in 2014 (£74 in E/W).
h. to k. (partner pension, death in service, ill-health etc. – same as in current scheme)
l. “Actuarially fair early/late retirement factors on a cost-neutral basis except for those retiring earlier than their NPA at age 65, 66 and 67, who will have early retirement factors of 3% per year (relative to their NPA)” = WE GET LESS PENSION if you don’t work on until new, higher, normal pension ages. The only slight concession offered here is that, instead of losing around 5% of your pension for every year you retire before your NPA, the Government will kindly only steal 3% per year from you if you decide to retire at 65-67. This will still mean a big loss of your pension if you decide you can’t struggle on to 67 or 68 but need to take your pension earlier. If you decide to retire at 65, when your NPA to get a full pension is 68, you would still lose 9% of your entitlements. The Government know most of us can’t struggle on until 68 – so they can rob our pensions.
m. “An employer cost cap to provide backstop protection to the taxpayer against unforeseen costs and risks” (In other words, if they decide that we are living longer, the employers won’t have to pay more – the extra costs will be borne by us, the employees).
3. “The gross cost ceiling has been fixed at 21.7%” = WE PAY IN MORE, THEY PAY IN LESS! Employees’ contributions will be going up to an average 9.6% from the existing 6.4% - a 50% increase. To total 21.7%, that means employers’ contributions will be going down from 14.1% to 12.1%. No wonder Danny Alexander bragged in Parliament that his proposals will make pensions "substantially more affordable to alternative providers" - paving the way for further privatisation by driving down the cost of our pensions.
6. “Teachers who, as of 1 April 2012, have 10 years or less to their current pension age will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current Normal Pension Age”. This is simply the ’10-year protection” that was offered – and rightly rejected as being insufficient – back in November. Even these teachers would still have to pay in more from 2012 and get less in retirement due to CPI.
7. “Members who are within a further 3.5 years of their Normal Pension Age, i.e. up to 13.5 years from their NPA will have limited protection”. This was the only slight further concession giving some protection to teachers aged between 46½ and 50 by April 2012. The Government’s figures show about 60% of teachers would get no protection at all.
Wednesday, 21 December 2011
Emergency Conference to Organise Against Pensions Retreat - Jan 7
I have received this invitation from the PCS Left Unity National Committee - please attend and forward to your colleagues:
Organising Conference:
DEFEND PENSIONS - ESCALATE ACTION
- NAME DAY FOR NATIONAL STRIKE
Friends Meeting House (opp. Euston Station)
Saturday 7th January 2012 11am – 4pm
Chair: Janice Godrich PCS President
Main Speaker: Mark Serwotka PCS General Secretary
(other speakers to be announced)
November 30th was the biggest show of strength from Britain’s trade unions in living memory. It shook the coalition government and provided a firm foundation for the escalation of industrial action to defeat the unjustified attack on pensions and to challenge the coalition’s pay freeze, cuts and privatisation programme.
At the TUC’s Public Sector Liaison Group Mark Serwotka on behalf on PCS argued the TUC should set the date for a further day of nationally coordinated strike action to bring the government into serious negotiations. Although there was some support for this position the TUC general secretary Brendan Barber argued that all the unions should sign up to a so-called “Heads of Agreement”, this means the core issues, on which we took action, working longer, paying more and getting less, are surrendered, just as the government have wanted. Dave Prentis, the general secretary of Unison, argued for acceptance of this “deal”.
It is almost beyond belief that when the confidence of the movement is at its highest point in decades as a result of November 30th and with an additional 100,000 recruits due to the action such an abject surrender is being considered. Now is the time to set the date, as early as possible in 2012, preferably January, for a further day of nationally coordinated industrial action which can be escalated by bringing even more unions on board including workers, like those in Unilever, fighting to defend private sector pensions.
The PCS Left Unity National Committee invites all activists from all unions to an organising conference on the 7th of January to debate how we can build the campaign to defend our pensions and fight the cuts and prevent any unacceptable “deal” that makes us work longer, pay more and get less.
This will be an organising conference, not just a debating forum. It is intended to arm activists with the issues so they can go back to their workplaces and into their unions in order to build a campaign that will secure justice on pensions.
To cover costs there will be a registration fee of £5 for waged delegates.
FAIR PENSIONS FOR ALL - STOP THE CUTS - NO PRIVATISATION
Organising Conference:
DEFEND PENSIONS - ESCALATE ACTION
- NAME DAY FOR NATIONAL STRIKE
Friends Meeting House (opp. Euston Station)
Saturday 7th January 2012 11am – 4pm
Chair: Janice Godrich PCS President
Main Speaker: Mark Serwotka PCS General Secretary
(other speakers to be announced)
November 30th was the biggest show of strength from Britain’s trade unions in living memory. It shook the coalition government and provided a firm foundation for the escalation of industrial action to defeat the unjustified attack on pensions and to challenge the coalition’s pay freeze, cuts and privatisation programme.
At the TUC’s Public Sector Liaison Group Mark Serwotka on behalf on PCS argued the TUC should set the date for a further day of nationally coordinated strike action to bring the government into serious negotiations. Although there was some support for this position the TUC general secretary Brendan Barber argued that all the unions should sign up to a so-called “Heads of Agreement”, this means the core issues, on which we took action, working longer, paying more and getting less, are surrendered, just as the government have wanted. Dave Prentis, the general secretary of Unison, argued for acceptance of this “deal”.
It is almost beyond belief that when the confidence of the movement is at its highest point in decades as a result of November 30th and with an additional 100,000 recruits due to the action such an abject surrender is being considered. Now is the time to set the date, as early as possible in 2012, preferably January, for a further day of nationally coordinated industrial action which can be escalated by bringing even more unions on board including workers, like those in Unilever, fighting to defend private sector pensions.
The PCS Left Unity National Committee invites all activists from all unions to an organising conference on the 7th of January to debate how we can build the campaign to defend our pensions and fight the cuts and prevent any unacceptable “deal” that makes us work longer, pay more and get less.
This will be an organising conference, not just a debating forum. It is intended to arm activists with the issues so they can go back to their workplaces and into their unions in order to build a campaign that will secure justice on pensions.
To cover costs there will be a registration fee of £5 for waged delegates.
FAIR PENSIONS FOR ALL - STOP THE CUTS - NO PRIVATISATION
Pensions - Organise to Reject the Shoddy 'Deal'
The decision by the leaders of the main Local Government and Health unions like UNISON and GMB - and others like the ATL - to sign-up to the ‘Heads of Agreement’ on pensions is a sorry capitulation to Government pressure.
Just as, once again, another report reveals how big firms are getting away with billions of pounds of tax avoidance, trade union leaders have accepted cuts to the livelihoods of millions of workers who, once again, are expected to pay the price for a crisis that was none of our making.
If this deal is allowed to go through, it also risks encouraging this Government to accelerate all its other attacks on jobs, conditions and public services. In Parliament, Danny Alexander made absolutely clear that his proposals will make pensions "substantially more affordable to alternative providers" - paving the way for the further privatisation that was always a key driver to these pension cuts.
Fortunately, not every union leader has shown the same lack of backbone. The main education unions, NUT, NASUWT, UCU – along with UCAC in Wales and EIS in Scotland – have refused to sign-up by the imposed deadline. The PCS rejected the deal outright – and have the support of others like NIPSA. UNITE did not sign-up to the deal in Health after details of the proposals were shared with – and rejected – by their Health Sector National Committee.
While the weak-willed leaders will try to claim that they have won important ‘concesssions’, Danny Alexander’s assurance to Parliament yesterday reveals the truth, that the Government will still be able to make the planned "tens of billions of pounds" of savings if the ‘deal’ goes through,. The overall ‘cost-ceiling’ budget imposed for the schemes has not been lifted, so that any ‘concessions’ could only be paid for by worsening of arrangements somewhere else.
For example, UNISON have claimed improved 'accrual rates' - the rate at which pension benefits are built up – as a victory. But Alexander made clear to MPs that any improvement would be offset by a lower revaluation linked to prices rather than earnings. Or, as he put in bluntly: "These agreements deliver the government's key objectives in full, and do so with no new money since our November offer".
The sorry truth is that those union leaders have signed up to deals which are only marginally different to those which were correctly rejected in November and against which millions of workers took united strike action. The underlying principles of the ‘Heads of Agreement’ deals are brutally clear – public sector workers must pay more, to get less pension and to retire older. How can any serious trade union leader accept them?
Once the truth is revealed, and trade union members see how their pay and pensions are being cut, there will be real anger against leaders who have caved-in so easily. However, the Government hope that a deal can be rushed through before opposition from below can put a stop to it.
There is now an urgent need to campaign in every union for a rejection of the deal. Already it is reported that the Local Government unions are questioning what has been agreed after Eric Pickles sent a letter that apparently announced new conditions about limits to employers' contributions - meaning that employees' contributions would have to rise. http://union-news.co.uk/2011/12/breaking-news-unison-unite-and-gmb-withdraw-from-pensions-deal/
When the NASUWT and NUT Executives meet in early January to discuss the proposals, they must be opposed. In doing so, we must also confirm plans for further action alongside other unions in the New Year. At least now the stark reality will be clear to all – we fight on or we allow the Government to get away with their robbery of our hard-earned pensions.
As a key part of that urgent campaign, Left Unity in PCS, the union that has stood firmest against the proposals, has organised an emergency conference in London on Saturday January 7th in Friends Meeting House, Euston at 11 am. Mark Serwotka will be one of the main speakers. Everyone who is serious about defending our pensions against the Government’s attacks should try and be there.
Just as, once again, another report reveals how big firms are getting away with billions of pounds of tax avoidance, trade union leaders have accepted cuts to the livelihoods of millions of workers who, once again, are expected to pay the price for a crisis that was none of our making.
If this deal is allowed to go through, it also risks encouraging this Government to accelerate all its other attacks on jobs, conditions and public services. In Parliament, Danny Alexander made absolutely clear that his proposals will make pensions "substantially more affordable to alternative providers" - paving the way for the further privatisation that was always a key driver to these pension cuts.
Fortunately, not every union leader has shown the same lack of backbone. The main education unions, NUT, NASUWT, UCU – along with UCAC in Wales and EIS in Scotland – have refused to sign-up by the imposed deadline. The PCS rejected the deal outright – and have the support of others like NIPSA. UNITE did not sign-up to the deal in Health after details of the proposals were shared with – and rejected – by their Health Sector National Committee.
While the weak-willed leaders will try to claim that they have won important ‘concesssions’, Danny Alexander’s assurance to Parliament yesterday reveals the truth, that the Government will still be able to make the planned "tens of billions of pounds" of savings if the ‘deal’ goes through,. The overall ‘cost-ceiling’ budget imposed for the schemes has not been lifted, so that any ‘concessions’ could only be paid for by worsening of arrangements somewhere else.
For example, UNISON have claimed improved 'accrual rates' - the rate at which pension benefits are built up – as a victory. But Alexander made clear to MPs that any improvement would be offset by a lower revaluation linked to prices rather than earnings. Or, as he put in bluntly: "These agreements deliver the government's key objectives in full, and do so with no new money since our November offer".
The sorry truth is that those union leaders have signed up to deals which are only marginally different to those which were correctly rejected in November and against which millions of workers took united strike action. The underlying principles of the ‘Heads of Agreement’ deals are brutally clear – public sector workers must pay more, to get less pension and to retire older. How can any serious trade union leader accept them?
Once the truth is revealed, and trade union members see how their pay and pensions are being cut, there will be real anger against leaders who have caved-in so easily. However, the Government hope that a deal can be rushed through before opposition from below can put a stop to it.
There is now an urgent need to campaign in every union for a rejection of the deal. Already it is reported that the Local Government unions are questioning what has been agreed after Eric Pickles sent a letter that apparently announced new conditions about limits to employers' contributions - meaning that employees' contributions would have to rise. http://union-news.co.uk/2011/12/breaking-news-unison-unite-and-gmb-withdraw-from-pensions-deal/
When the NASUWT and NUT Executives meet in early January to discuss the proposals, they must be opposed. In doing so, we must also confirm plans for further action alongside other unions in the New Year. At least now the stark reality will be clear to all – we fight on or we allow the Government to get away with their robbery of our hard-earned pensions.
As a key part of that urgent campaign, Left Unity in PCS, the union that has stood firmest against the proposals, has organised an emergency conference in London on Saturday January 7th in Friends Meeting House, Euston at 11 am. Mark Serwotka will be one of the main speakers. Everyone who is serious about defending our pensions against the Government’s attacks should try and be there.
Monday, 19 December 2011
NUT Pensions Statement - NUT have NOT signed up to any deal
Update: I understand that four education unions refused to sign the deal today but are all 'reserving their position' until talks continue in the New Year - that's NASUWT, UCAC and UCU as well as the NUT.
Commenting on the latest round of Teachers’ Pension Scheme talks, Christine Blower, General Secretary of the National Union of Teachers, the largest teachers’ union said:
“Following lengthy discussions today the NUT was not able to sign up to the Government’s headline proposals. There was insufficient progress in terms of the Government’s position that teachers should work longer, pay more and get less.
In the NUT we reserved our position due to lack of progress but also the lack of documentation in certain critical areas.
“The NUT National Executive will meet in January to take a view on progress in the negotiations and next steps in our campaign.
“The Union remains committed to negotiations and will take part in talks in the New Year.
The following message will also be going on to NUT members tomorrow:
Pensions latest – update on talks with Government
Dear colleague
Despite the lengthy discussions over the last few days, the current proposals from the Government still do not address all of the NUT’s concerns. The Government still wants you to work longer, pay more and get less.
Under these circumstances the NUT has not been able to sign up to the Government’s headline proposals. In the New Year we expect to receive further documentation from the Government, which we hope will clarify the latest offer. We will keep you fully informed of how these proposals will impact on your pension entitlements.
The NUT will continue to represent your interests in the negotiations, as well as pursuing the court case over the RPI/CPI change.
Your National Executive will meet in January (January 12) to take a view on progress in the negotiations so far and next steps in our campaign, including any further proposals on industrial action.
Thanks to the many thousands of NUT members who signed Christmas postcards to Michael Gove. I was proud to deliver those to the DfE yesterday, with our Deputy General Secretary, Kevin Courtney. That so many of you signed them is a clear sign of the strength of feeling in the profession. Even since yesterday more than a 1,000 more signatures have arrived at our head office. Please see our website www.teachers.org.uk for a picture of yesterday’s hand-in of the postcards at the DfE.
.
Please continue to check the NUT website www.teachers.org.uk/pensions and follow us on Twitter at www.twitter.com/NUTonline for more information on the pensions campaign in the New Year.
I wish you a very well-deserved holiday.
With best wishes for Christmas and the New Year.
Yours sincerely
Christine Blower
NUT General Secretary
Pensions - Union leaders under pressure from all sides
A lively lobby of the TUC this afternoon made sure that every delegate attending the key meeting of the Public Sector Liaison Group knew how strongly trade union members felt about the worrying suggestions that some public sector unions were about to sign an unacceptable deal on pensions.
On the steps of Congress House, Mark Serwotka made a strong defence of the PCS' stand in refusing to cave-in to the bullying tactics of the Government. Unfortunately reports suggest that some unions seem ready to sign-up to the 'Heads of Agreement' letter setting out the principles of the Government offer, even though none of the fundamentals have changed from the offer that we all rejected in November - and took united strike action to oppose.
The Government has been trying to blackmail union leaders into signing-up to this unacceptable deal by threatening that if they didn't, an even worse offer would be imposed - and that those unions that didn't cave-in would be thrown out of all future talks. This 'punishment' has apparently already been announced for the PCS.
But union chiefs seeking to do a deal are also under pressure from below - knowing that they will have to justify their decision to union members who will want to know why they have thrown in the towel when no serious further concessions have been won. Where the details of the deal have been shared - e.g with the Health Sector National Committee of UNITE - it is reported that there was an overwhelming view given to the negotiators that they must reject the deal.
In Education, talks have been going on for much of the day, with the NUT and NASUWT apparently trying to persuade other education unions to stand firm. News to follow.
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