Magazine article Public Finance

Unions Prepare to Strike over LGPS - Again

Magazine article Public Finance

Unions Prepare to Strike over LGPS - Again

Article excerpt

Almost a year to the day after Deputy Prime Minister John Prescott caved into pressure on pension rights, local government union members are once again being balloted for strike action on the issue.

Unions representing 1.5 million workers are preparing to ballot. Ballot papers have already been sent to 829,000 Unison members and are due back by March 10.

Unison head of local government Heather Wakefield has told Public Finance that action is likely on more than one date'.

The issue remains the future of the 85-year rule. This enables scheme members whose age plus years in service add up to 85 to retire on full benefits at 60.

A parliamentary order scrapping the rule was hastily revoked last year, following threats of strikes timed to coincide with the general election.

But an almost identical draft order was laid before Parliament in December, upon which consultation is due to end on February 28. Unions fear this new order will become law in April and the 85-year rule will be abolished from October 1.

While the position of local government leaders has not shifted since last year's dispute, the unions have given some ground. They now accept, in principle, that the rule must be removed and that cost savings have to be made.

The focus of the dispute has now moved on to the transitional protection arrangements for existing scheme members. The draft order protects only those who would qualify under the rule over the next seven years - far short of the lifetime protection recently granted for other public sector pension scheme members.

The government has adopted a neutral approach, describing the draft 2013 protection limit as 'indicative' only, but saying the cost of any extended protection should not fall on the taxpayer.

That has left the Local Government Association and unions in deadlock. The disagreements are mathematical, too, as each side gives radically different calculations of the costs and savings of any amendments.

The LGA claims demographic pressures mean the 85-year rule is not sustainable. The removal of the rule became even more urgent for employers after they instructed their actuaries to calculate future contribution rates based on it being scrapped last year.

Since then, the LGA has not referred to the savings' that removing the rule would bring, but to the costs' of not removing it, which would add to the scheme's estimated £27bn 'black hole'. …

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