- Conference
- 2010 National Delegate Conference
- Date
- 16 February 2010
- Decision
- Carried as Amended
The Local Government Pension Fund (LGPS) and benefits must be defended and fought for as a key priority for UNISON. Unlike the other public sector schemes the LGPS obtains income from its investments. Therefore the governance and economic performance of the funds are critical to the survival of the benefits they deliver.
Any detrimental changes to the LGPS would constitute a major attack on the current and future living standards of millions of UNISON members and their dependents.
The LGPS is, in principle, a scheme with a very long term horizon, where bankruptcy is not as great a concern as in the private sector, and where the improvement of a flow of investment income should be a higher priority than temporary movements in underlying asset values.
Despite the low market values for assets, especially at March 2009, the LGPS is strongly cash positive, (benefits paid out in 2008-09 were £5.6bn, against a gross income of £10.2bn) in England and Wales.
Since 2004, overall annual fund management costs (now averaging £250m per annum) have risen from 0.17% of asset values to 0.25%, and have drawn an increasing share of investment income (rising from 6.4% to 8.5%) over the same period. Smaller schemes have typically higher administration and investment management per capita costs.
On top of all this the LGPS still sits outside of the EU Institutions for Occupational Retirement Provision (IORP) Directive which means there is no requirement to invest the funds in the best interests of scheme members.
Conference recognises that the prospect of further detrimental changes to the LGPS forms part of an overall attack on pension rights, and in particular an attack on all public sector pension schemes. The LGPS cannot successfully be defended in isolation. We recognise that we need a strategy that places defence of the LGPS at the heart of resistance to the overall attack on pension rights.”
Therefore Conference instructs the National Executive Council to ensure the survival of a final salary LGPS by devising a programme, following consultation within the union, based on the following:
1)Establishing the IORP Directive, Articles 8 and 18 into the LGPS and ensuring trade union representation;
2)The creation of one fund each for England, Wales and Scotland, there is already one fund in Northern Ireland – large single funds are more efficient the OECD recommends member states merge their pension funds to protect them against the recession, while ensuring that the employment, skills and knowledge of workers in local authority pension sections are safeguarded;
3)Demanding efficiency savings in fund management contracts – estimated savings are around £150/£200 million a year;
4)Establishing effective and modern methods of administration to ensure a commitment to no compulsory redundancy and virtual working for current workplaces – most savings are in fund management charges not scheme administration;
5)Setting benchmark targets for administration and fund management charges based upon best practice;
6)Undertaking the most effective benefit structure that favours more equitable delivery of benefits for the low paid;
7)Consulting internationally with other public sector unions and their fund managers, i.e. from the Dutch public sector fund ABP and from ABVAKABO or the Australian Super Funds and the Australian Services Union;
8)Ensuring that UNISON activists have the training and capacity to effectively represent members’ interests in these matters;
9)Ensuring that the minimum standards of responsible investment are those developed by United Nations Principles for Responsible Investment and the funds are encouraged to become signatories
10)Placing defence of the LGPS at the centre of a strategy to build unity across service groups and sectors and with other unions to oppose any proposed detrimental changes to pension rights.”
Conference calls on the National Executive Council to defend the LGPS vigorously from any attacks by Government and/or employers by campaigning politically and where necessary using legitimate industrial action.
If other public sector pension schemes are also threatened, every effort should be made to coordinate industrial action across appropriate Service Groups and with other trade unions.
We further call on the National Executive Council wherever possible to coordinate such industrial action with other service groups and sectors, and other trade unions defending pension rights.