The government made an offer to the unions on 15 December in relation to the civil service pension scheme.The letter sought the agreement of negotiators that the offer would be recommended to union executives with a view to agreement. PCS has responded today (Monday 19 December) that these proposals will be put to the national executive committee, but that they will not be recommended as they do not provide a basis for agreement.
Click to download the letters or visit:http://www.pcs.org.uk/en/news_and_events/pcs_comment/index.cfm/id/D8BDE8C6-C045-4455-891ECD6996F8E892
Letter from government 15 Dec 2011
Letter to Francis Maude 19 Dec 2011
During negotiations the government has shown little flexibility on the key issues in the dispute. The offer will mean that all civil servants will pay more, all aged under 50 will work longer, and all will get less in retirement.
The offer
The government plans that current civil service pension schemes (Classic, Classic Plus, Premium and NUVOS) will close and will be replaced by a new scheme on 1 April 2015. The government’s offer relates to this new pension scheme. Those within 10 years of pension age will remain in the current schemes – all others will be offered the new scheme. There is some protection for those just over 10 years from retirement as well.
The government’s offer starts from the assumption that the new scheme is based on the NUVOS scheme. However, the value of the existing NUVOS scheme was significantly reduced when the government decided to change the inflation indexation from RPI to CPI. A NUVOS pension is not based on a final salary but a career average salary. Career average salary is calculated by taking a percentage of each annual salary (2.3%) and up-rating it by inflation. By cutting the inflation indicator from RPI to CPI, the government at a stroke reduced the value of the existing NUVOS scheme.
Click to see how career average schemes work:
How CARE works
Paying more
There are two elements to the government plans for increasing contributions:
From 1 April 2012. The government has confirmed plans to introduce increased contributions for all public sector pension members (including those within 10 years of retirement), by an average of 3.2% of salary, phased in over 3 years. The PCS pension calculator gives information about the increased contributions.
From 1 April 2015. The contribution rate, which will apply to the new scheme, will be for all except the lowest paid - 5.6% of salary.
How much will you lose - use the PCS pension calculator?
Working longer
The new scheme will have a pension age (the age at which scheme members can receive an unreduced pension) in line with the state pension age (SPA). How this will work in practice has still to be discussed. Classic and Premium schemes have a pension age of 60, and NUVOS has a pension age of 65. The state pension age will rise to 68. People born on or after 6 April 1960 but before 6 April 1961 will have an SPA between 66 and 67. People born on or after 6 April 1961 will have an SPA of 67 or higher.
Getting less
After retirement - inflationary pension increases will increase by CPI, rather than RPI, which will mean that over a normal 20 year retirement, pensions will be worth up to 20% less.
PCS Response
The largest union in the civil service, PCS, today rejected the government's latest attempt to force public servants to pay more and work longer for less in retirement.
Government officials had previously imposed an arbitrary 10am deadline on the civil service unions, threatening to exclude them from future talks if they did not sign up to the changes. This was later put back to 3pm.
PCS general secretary Mark Serwotka has written to Cabinet Office minister Francis Maude this afternoon rejecting a formal offer - which would mean contributions increasing from April 2012, the pension age rising to 68 and pensions indexed by CPI instead of RPI. These terms had already been unanimously rejected by the union's national executive, and the union has reiterated its call to ministers to seriously negotiate on these core issues.
Ministers have consistently refused to negotiate on these three key points and, in the case of the CPI indexation, introduced it in last year's budget without any prior consultation, forcing unions to go to the High Court to challenge the switch.
While talks with officials have been held in recent weeks on aspects of the civil service scheme, there have been no central negotiations with ministers on the key issues under dispute since the government's 'final offer' was announced by chief secretary to the Treasury Danny Alexander on 2 November.
There is a meeting of the TUC's public sector group of unions at 5pm today, where unions will receive updates on scheme talks elsewhere.
PCS will say that the offer on the table in the civil service is not good enough and that the union believes further industrial action should be organised as early as possible in the new year if the government continues to refuse to negotiate on the core issues.
Mark Serwotka said: "Nothing has changed since two million public sector workers were on strike on 30 November and we continue to oppose the government's attempt to force public servants to pay more and work longer for less.
"It is uncontested that all the public sector pension schemes are affordable now and in the future. Public servants should not be forced to pay off a budget deficit caused by the greed and recklessness of bankers and exacerbated by the Tory-led government's economic incompetence."
