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29/09/2011 - Local Authority pensions: Pay more or get less!

THE leaders of Britain’s local councils have warned that the 3.2% hike in contributions to public sector pensions that central government is imposing could lead to the destruction of the local government pension scheme.  The local authority scheme differs from other areas of the public sector in that members’ contributions are invested to produce a pension instead of a ‘pay as you go’ basis so any widespread opting out from the scheme caused by the contributions increase could be disastrous for the future of the scheme, (source: Financial Times Weekend 24/25 September 2011).

Talks between the Unions and representatives of local authorities over the best way to resolve the potential crisis have yet to bear fruit.  The offer from local government employers includes: no rise in contributions for those earning under £15,000 per year, a 1.5% rise for those earning between that and £21,000 and a rise of 2% to 2.5% for those earning above £21,000.  Also proposed was an increase in the pension age from 65 to 66 in 2014 and the option of not paying the higher contributions with the result of getting a slightly reduced pension for each year of service accrued from 2014 onwards.

Speaking for the local authorities, Sir Merrick Cockell, the chairman of the Local Government Association, is quoted as saying that the offer was “a considerable improvement” on the proposals offered by the government.  Unison, however, stated that “it could not sign up to these plans” and described them as “nothing more than a £900m tax on our members”.

Solidarity calls for the government to ensure fair treatment for all public sector pensions.  If the money could be found to bail out the reckless banksters then surely the case for securing the future in old age for our public sector employees is so much more deserving of financial assistance?


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