UNISON Scotland welcomes Lord Hutton’s warning on pension opt-outs

UNISON Scotland has welcomed Lord Hutton’s warning to ministers that punitive pension reforms will force people out of public service pensions.

His concerns echo those of UNISON, Scotland’s largest union in public services, who claim proposed contribution increases of 50 per cent are not only unfair but completely unaffordable and will leave members with no option but to leave pension schemes. Mass opt-out will also see more cuts in public services, as employers will face increased national insurance contributions for each worker not in the pension scheme.

Recent surveys have already shown that more than 50 per cent of staff will opt-out of pension provision if contributions are increased much above current levels.

Dave Watson, UNISON’s Scottish Organiser, said: “We share Lord Hutton’s concerns and know that many of our members, particularly low-paid women workers, would have no choice but to opt-out of pension schemes if contributions are increased. These increases would not only place a further burden on our members during a period of pay restraint and rising living costs, but mass-opt out of schemes would place increased pressure on welfare benefits, leaving the government with longer term costs.

“Public service workers should not be left to pay the price for bailing out the bankers and the UK and Scottish Governments must heed Lord Hutton’s warning and work with trade unions to examine all available options.”

For more information on Scottish public sector pensions see UNISON’s briefing at www.unison-scotland.org.uk/briefings/MSPBriefing_Pensions_June2011.pdf.