Thursday, 10 March 2011

UK Government will use Hutton report to raid public sector pensions

UNISON chief, Dave Prentis, is warning that the UK Government will use today’s Hutton report as a Trojan horse to raid the pensions of millions of public sector workers. The union is sending out a message to its 1.4m members
warning that industrial action is now one step closer.

Dave Prentis, said:

“Whatever the Hutton report may say about fairness, the Government will use
it as a Trojan horse to raid the pensions of hard working public sector
workers. Pensions that our members have paid into year in year out and
which are fair and affordable.

“In fact, even before the report today, the Government announced they were
increasing employee contributions by 50%.

“There is a lot of nonsense talked about public sector pensions – they are
not gold plated. The average is very low - in local government, the average
is just over £4,000, falling to £2,800 for women.

“Asking workers to work longer for less is simply not an option. We want to
talk to the Government about their response as a matter of urgency. But I
am sending out a clear message to our 1.4 million members warning them that
industrial action is now one big step closer."

There is a lot of misinformation about public sector pension schemes. The
facts are:

* The local government and NHS pension schemes were renegotiated in 2006
to make them sustainable and affordable.

* Both schemes are cash rich – more is going in than coming out.

* Last year, the NHS scheme received £2billion more in contributions than it
paid out and this money went straight to the Treasury.

* The average pension in public service pension schemes is very low, for
example in local government, the average is just over £4,000, falling to
£2,800 for women.

* If these people didn’t save for their retirement, they would have to rely
on *means-tested benefits paid for by the taxpayer.

* Pensioners are already being hit with the move from RPI to CPI to
calculate annual inflation increases - this will reduce their value by 15%.

* When the NHS scheme was renegotiated, protection was built in for current
members to retain their retirement age of 60. New members have a retirement
age of 65. If that agreement is broken, industrial action could follow.

* Government cuts to local government employers grants mean that the
shortfall in pension contributions has to be made up by employees. They may
have to pay between 50% and 100% more for a reduced pension. This is
effectively a tax on low paid workers.

* Studies have shown that if the contributions rise too much, workers will
desert the local government scheme and it could collapse.

* The local government scheme invests more than £100billion in the UK
economy. If the scheme collapsed, it would have a devastating impact on the

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