Magazine article Public Finance

Unions in Standoff with ODPM over Pensions

Magazine article Public Finance

Unions in Standoff with ODPM over Pensions

Article excerpt

Local government unions look likely to press ahead with ballots for industrial action over controversial new pension regulations, despite last-minute talks with ministers to avert politically damaging strikes just weeks before a general election.

As Public Finance went to press, Unison and the T&G confirmed that their 'time-critical' strike ballots would go ahead, despite good progress in talks with Deputy Prime Minister John Prescott and local government leaders this week. The parties were due to meet again on February 17 to try to reach an agreement.

From April, the new regulations would raise the retirement age in the sector from 60 to 65 and withdraw the '85-year rule' that allows workers to access their pension once their combined age and years of service total 85 years.

The unions argue that there has been no negotiation over the regulations, described by local government minister Phil Hope as 'moderate', and they will come in 12 months before similar changes to other public sector schemes.

Unison general secretary Dave Prentis claimed that ministers had conceded that 'they'd taken their eyes off the ball' and promises had been made last July to negotiate on all proposed reforms.

But the Office of the Deputy Prime Minister wants to overhaul the Local Government Pension Scheme in two phases to cut the spiralling cost of the scheme and retain its relatively lucrative final salary structure.

Ministers are, apparently, willing to negotiate on phase two of the change, which would include new contribution rates for scheme members from 2008.

Unions argue the changes would erode what they consider to be deferred pay, but the ODPM is concerned that long-term pension liabilities across councils have already reached £30bn.

The ballots are due to begin next week but strike action could still be averted if the regulations are either repealed or delayed. The deadline for this is February 23.

Local government employers, however, oppose any delay on cost grounds. During the talks, Local Government Association chair Sir Sandy Bruce-Lockhart and Employers' Organisation executive director Rob Pinkham produced a study by actuaries Mercer, published on February 14, which estimated that the annual cost savings were around £200m. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.