Council pension changes approved by Unison and Unite
- 24 August 2012
- From the section Business
Changes to the local government pension scheme have been approved by members of the Unison and Unite unions.
They voted by 90% and 84% respectively to back a deal negotiated with council employers to bring in a new career average scheme for all staff in 2014.
The changes will affect 1.6 million employees in England and Wales and now require government approval.
All staff will see their pension ages, for future service, rise in line with the state pension age to at least 68.
Last week, members of the GMB union voted by 95% in favour of the deal.
The unions had recommended the change, even though it will lead to much higher contributions for higher paid staff.
Unison's chief local government negotiator, Heather Wakefield, said: "These were tough negotiations, but with a focus on the majority of members who earn less than £21,000 a year, we have ensured that current scheme members can afford to remain in the scheme.
"This is vital for many of our members who have suffered a decline in earnings as a result of the Coalition's pay freeze policies.
"We will continue to campaign with all of the union, through the TUC, against the proposals to increase the state retirement age," she added.
Ministerial approval needed
The employers' body, the Local Government Association, is also consulting with councils themselves on the changes.
The result of that consultation is expected in the next two weeks.
Then it will be down to Eric Pickles, the Communities and Local Government Minister, to rubber stamp the change.
The Department for Communities and Local Government has indicated it will look at the result of ballots and take a view by October.
In the Queen's speech in May, the government said it would legislate in this Parliament to push ahead with its wider public sector pension changes.
If the local government deal goes through it will cut the combined contribution rate for staff and employers from 21.7% of staff salaries to 19.5%.
That will save just over 2% of the annual local authority pay bill, which will lead to council employers saving £600m a year.
One small group of staff who have rejected the changes to the council scheme are fire brigade control staff, represented by the Fire Brigades Union.
They voted against by 90%.
If agreed, the career-average scheme - less generous than the current final-salary scheme in local government - will start a year earlier than the planned similar changes for staff in the NHS, civil service and teaching.
The unions say they have safeguarded the position of low-paid and part-time staff.
Both the unions and the employers feared these workers would leave the local government scheme altogether, rather than pay more for their pensions.
At the moment the maximum contribution rate for local authority staff is 7.5% of their salaries.
When the career average scheme starts in 2014, staff earning more than £43,000 will pay higher contribution rates, ranging from 8.5% of salaries to a maximum of 12.5%.
Along with slightly lower contribution rates for some staff earning less than £20,400, this will leave the new scheme's average contribution rate at 6.5%, the same as at present.
Another feature of the new local government scheme is that staff who feel that their pensions contributions are unaffordable will be able to opt for a 50% pension by paying only half their new contribution rate.
Elsewhere in the public sector, the government is ploughing ahead with its plans to change the pension schemes, despite continuing opposition from some trade unions.
The government has already enforced higher contributions on staff this year, to be followed by more in 2013 and 2014.
Earlier this year some doctors, NHS staff and civil servants took part in further industrial action, including more strikes, to protest against changes to their pension schemes.