According to the Chancellor, The Local Government Pension Scheme (LGPS) is no longer sustainable due to people living 10 years longer than they did 40 years ago, and that the greedy working class members of gold plated pension schemes need to accept this and the coalition changes to the LGPS.
These changes include increasing the pension age from 65 to 68, increasing member contributions to the scheme while decreasing employer contributions although members will be claiming less than they do now.
So what defence do public sector workers have to this?
1. The LGPS has a positive cash flow, with income from investments and contributions exceeding expenditure on benefits by £4-5billion every year.
2.members contribute an average of 6.6% to the scheme with higher earners paying proportionately more
3.the average employer contribution rate for current service is 12.2%. In the private sector the comparable employer contribution average is 15%
4.the chancellor intends to raise 1Bn from LGPS scheme members by making employees pay an increased average of 9.6% for future service while the employer pays 9%.
5. In April 2008, reformed schemes were launched which reduced the cost to employers year on year and increased the average member contribution from 5.8% to 6.6% to compensate for people living longer.
6. Further increases announced by the chancellor will not increase funding to the scheme but will operate as a tax on pension saving. 3.8bn will be be used to help pay off the money used to bail out the banks.
7. 7000 employers participate in the 101 LGPS including private companies and charities. 75% of local government employees, more than 4 million people are members of the scheme.
8. The LGPS fund currently holds more than £150billion in investments and assets, enough to pay benefits for over 20 years
9. The average pension payment from the LGPS is around £4,200 a year but only £2,870 per year for women due to lower income.
10. The chancellor wants employees to work to 68 instead of 65 before pension claims can be made. This will mean teachers, nurses, library staff will not be able to retire before this regardless of the pressures posed in workforces with ever decreasing staff and ever increasing pressure.
11. Pay will increase inline with the consumer price index rather than the retail price index which represents the true cost of living. As pay remains low against inflation, so will pension contributions from both the employee and the employer.
Unison, GMB, unite, Napo, Ucatt, Aspect, FBU, NIPSA, NUJ, NUT, and the coalition of resistance as well as more than 60% of the public are just a few groups who oppose these changes and support strike action on the 30th November 2011.