Pensions update Nov 2012

Our pensions are still under attack

Why you need to take action now to amend the Public Service Pensions Bill

Take action now!

Click here to send emails to your MP and MSPs direct

(From Pensions Bulletin No 32 - Oct 2012 pdf)

The UK Government's Public Service Pensions Bill sets out how new public service schemes are created and prescribes the key elements of all schemes including governance and benefits.

There are very significant implications for Scotland because primary pension legislation is a reserved issue. At present our schemes are covered by the UK Superannuation Act 1972. This is largely enabling legislation that allows the Scottish Parliament to design schemes that meet our requirements. In practice the NHS scheme closely follows England because changes to the scheme require Treasury approval. No such approval is required for the LGPS and that remains unchanged in this Bill. However, the Bill, for the first time, prescribes key elements of all schemes and that will apply to the LGPS. It is therefore LGPS members who will be most significantly impacted by the Bill.

The main prescriptions include:

• A career average, not a final salary scheme. Revaluation percentages as specified by the Treasury.
• Retirement age linked to the state pension retirement age.
• A cost cap as defined by Treasury.
• Rules for governance and fund valuation.

All of these matters are currently decided in Scotland and therefore the Bill significantly undermines the current LGPS agreement. If the Bill goes through unamended the Scottish Parliament will be required to bring the LGPS into line on these points by April 2015. This will require an intensive period of negotiation on these points. None of these issues impacts directly on employee contributions, other than indirectly through the cost capping provisions.

Scottish Government officials have advised ministers that they must implement the UK legislation. However, UNISON has taken legal advice that this legislation requires the approval of the Scottish Parliament through a Legislative Consent Motion (Sewell convention).

We have written to John Swinney MSP, the Cabinet Secretary for Finance urging him to take this course of action. We have argued that Parliament should not agree to this legislation unless it is amended to retain the independence of the Scottish LGPS.

John Swinney has previously attacked interference by Westminster on this issue, so now is the time to put the rhetoric into action.

Take action now. Send emails to your MP and MSPs direct

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