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Public sector pension deal outlined by government Public sector pension deal outlined by government
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An outline agreement for big changes to public service pension schemes has been achieved, Treasury Chief Secretary Danny Alexander has told Parliament.An outline agreement for big changes to public service pension schemes has been achieved, Treasury Chief Secretary Danny Alexander has told Parliament.
After months of negotiations, and a national strike, he said most trade unions had now agreed in principle to new schemes from 2015.After months of negotiations, and a national strike, he said most trade unions had now agreed in principle to new schemes from 2015.
The deals would change pension schemes for staff in the NHS, local government, civil service and education.The deals would change pension schemes for staff in the NHS, local government, civil service and education.
He said this would eventually save the government tens of billions of pounds.He said this would eventually save the government tens of billions of pounds.
"These heads of agreement deliver the government's key objectives in full and do so with no new money since our November offer," he told MPs."These heads of agreement deliver the government's key objectives in full and do so with no new money since our November offer," he told MPs.
However, several trade unions, including the biggest civil service union - the Public and Commercial Services (PCS) union - said they had definitely not signed up to the outline agreements.However, several trade unions, including the biggest civil service union - the Public and Commercial Services (PCS) union - said they had definitely not signed up to the outline agreements.
Chris Keates, general secretary of the NASUWT teaching union, said: "The NASUWT has not signed the heads of agreement document and has reserved its position." The National Union of Teachers (NUT), the NASUWT, the University and College Union (UCU) and Welsh teaching union UCAC all said they would not sign.
Sally Hunt, general secretary of the University and College Union (UCU), said it had also decided to reserve its position. "We have requested further documentation and clarification on a number of aspects of the proposals," she said.
'Final position''Final position'
Mr Alexander told MPs that the progress he had made in negotiations meant that increased contributions would be phased-in over the three years from 2012. Mr Alexander told MPs that the progress in negotiations meant that increased contributions, amounting to an average of 3.2% of staff salaries, would be phased-in over the three years from 2012.
However, further increases would be reviewed in the light of the first year's experience in case there had been high drop out rates from staff who could not afford to pay more. However, the second and third year of these increases would be reviewed in the light of the first year's experience, in case there had been high drop out rates from staff who could not afford to pay more.
From 2015 the various pension schemes under consideration will be changed to a career average basis with their normal pension ages rising in line with the state pension age.From 2015 the various pension schemes under consideration will be changed to a career average basis with their normal pension ages rising in line with the state pension age.
He described this as the government's "final position", with the trade unions who now support the outline agreements agreeing not to call any further strikes.He described this as the government's "final position", with the trade unions who now support the outline agreements agreeing not to call any further strikes.
He acknowledged that the draft agreements would now have to be approved by union members and that there would have to be much more detailed negotiations.He acknowledged that the draft agreements would now have to be approved by union members and that there would have to be much more detailed negotiations.
'New atmosphere' New schemes
An initial agreement, signed on Monday by all the unions representing local government workers, most health staff and some teaching and civil service unions, still has to be ratified by union executives. Mr Alexander said it was "deeply disappointing" that he had not been able to reach any agreement with the main civil service union, the PCS.
The government has made concessions to improve the pension schemes' accrual rates - the speed at which employees build up their pension entitlement. He described last month's national strike of more than 20 public service unions as an "unnecessary interruption", before outlining the way some of the new career average pension schemes would probably operate, for all staff, from 2015.
But ministers are insisting that the schemes will be more affordable because they have not budged on the big issues.
  • In the civil service, the accrual rate will be 1/44th of salary, revalued each year in line with the consumer prices index (CPI).
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  • In the local government scheme, where negotiations have different parameters, the pension age will be linked to the state pension age and the new scheme will probably be a career average one.
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  • In the NHS, the accrual rate will be 1/54th of salary each year, revalued in line with CPI plus 1.5%.
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  • In the teachers' pension scheme, the accrual rate will be 1/57th of salary each year, revalued in line with CPI plus 1.6% each year.
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Most public servants will have to work longer before they receive their full pensions, and those pensions will be based on their average earnings rather than on their final salaries. Separate proposals for the police, armed forces, judges and fire service have still to be published.
The unions met at the Trades Union Congress (TUC) at the end of Monday, a day in which separate negotiations had moved at a varying pace. Mr Alexander promised that if a deal was done there would be no further changes to public service pension schemes for 25 years.
TUC general secretary Brendan Barber said there had been a "new atmosphere" in the negotiations since up to two million workers went on strike last month.
Teaching and civil service
Last week, the government confirmed it was pressing ahead with raising pension contributions next year for teachers and civil servants, even though there was no agreement with unions at that time.
After Monday's talks, the PCS union - the civil service's largest - said "nothing has changed" since the strike on 30 November.
The second biggest civil service union, Prospect, has authorised its negotiators to continue talking to the government about changes to the civil service pension scheme.
It said it would not call for further industrial action while the negotiations on a new scheme were under way.
NHS pensions offerNHS pensions offer
A new offer on NHS pensions was put to the unions earlier this month. Under the updated proposals:A new offer on NHS pensions was put to the unions earlier this month. Under the updated proposals:
  • 530,000 staff earning between £15,000 and £26,557 would be spared any rise in pension contributions next year
  • So would those less than 10 years away from retirement
  • Higher-earning employees would be expected to pay more
  • Staff in areas transferred out of the public sector will retain their right to stay in the pension scheme
  • There would also be an improved accrual rate - the rate at which the value of a pension builds up, within a career average pension scheme
  • The government has also pledged to consult on the impact of changes on staff in the emergency services
  • 530,000 staff earning between £15,000 and £26,557 would be spared any rise in pension contributions next year
  • So would those less than 10 years away from retirement
  • Higher-earning employees would be expected to pay more
  • Staff in areas transferred out of the public sector will retain their right to stay in the pension scheme
  • There would also be an improved accrual rate - the rate at which the value of a pension builds up, within a career average pension scheme
  • The government has also pledged to consult on the impact of changes on staff in the emergency services
Unison is poised to put the government's "final offer" to members of its executive and possibly its members in the new year.Unison is poised to put the government's "final offer" to members of its executive and possibly its members in the new year.
The union said it had made progress on issues such as contribution rates for the low-paid and people close to retirement but other areas had been "a damage-limitation exercise". The union said it had made progress on issues such as contribution rates for the low paid and people close to retirement, but other areas had been "a damage-limitation exercise".
Rehana Azam, national officer of the GMB which was also involved in NHS pensions negotiations, said discussions had been "extremely difficult" and a lot of detail still needed to be worked through.Rehana Azam, national officer of the GMB which was also involved in NHS pensions negotiations, said discussions had been "extremely difficult" and a lot of detail still needed to be worked through.
The GMB also said it was reconsidering its position regarding the proposals for the local government pension scheme on which a deal was thought to have been all but settled.
Brian Strutton, national officer of the GMB, said this was in the light of "new conditions", thought to be a limit on employers' contributions laid down by Local Government Secretary Eric Pickles.
However, Mr Alexander said this was the result of a letter that was sent in error and had now been withdrawn.