- Conference
- Date
- June 16, 2017
- Decision
Conference is concerned that good final salary pension provision is continuing to decline. Defined benefit pension schemes that guarantee pensions based on final salary or career average are under threat and many in the Education and Energy sectors have closed to new entrants and some have closed to current members as the scheme has closed, and there is no future pension accrual, and many schemes that remain open are increasing member contributions and reducing pension benefits and the way future pension is calculated.
The main reason employers give is high costs and risk of further increases of providing the benefits leading to increased employer contributions.
Even in the public sector certain employers are also looking at ways to reduce pension costs. In some cases by tempting members to leave the schemes by offering pay increases. Another tactic is to transfer services to arms length companies that then try to exclude new starters from the Public Sector Schemes.
There are a number of reasons why costs are increasing but by far the most damaging is the assumptions the Schemes and their Actuaries are using to value the future growth of their funds.
For example, many funds base future growth assumptions on the likely increase in Gilts. Yields have in this area been artificially low since the last recession so basing returns just on Gilts increases the cost of pension benefits.
We believe a better method would be to base it on the potential growth of the actual assets of the fund. For example if the LGPS England and Wales funds had all used central government assumption on future growth in 2013, the past service deficit of £46 billion could have been halved and employer contributions reduced and that could have led to less cuts in services and jobs.
Conference welcomes the commissioning of independent actuarial advice to help branch negotiations in the private sector to improve Pension settlements for members. Particularly where defined contribution schemes, which do not guarantee any level of retirement income, have replaced defined benefit schemes there has been success in increasing the employer contributions.
Conference calls on the National Executive Council to continue to recognise the importance to the future of good pension provision and to engage and empower scheme members to question and challenge the way the costing of their pension benefits are calculated.
Conference further calls on the National Executive Council to:
- Continue to campaign to retain and improve upon good quality pension schemes for all our members;
- Brief all UNISON Pension Leads and Pension Champions on how to engage on this crucial issue and make courses and speakers available for regions and branches on this matter;
- Produce and distribute a negotiators guide for negotiators and members on alternative cost assumptions for schemes;
- Raise this issue with Government and other political parties through the TUC and Labour Link and continue to lobby and press them to change the assumptions used to calculate the value of the future growth of our members pension schemes.
North Yorkshire Br. of Unison
NEC POLICY: SUPPORT