Pensions – what we need to know

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2013 National Women's Conference
15 October 2012

Conference notes that huge changes to occupational pensions are taking place, with the introduction of pensions auto enrolment.

1) All employees paying income tax and aged between 22 and State Pension Age are affected.

2) From the 1 October 2012 the very largest employers were required to ensure that eligible staff were automatically enrolled into a qualifying workplace pension scheme

3) By February 2018 all employers should be operating pensions auto-enrolment

4) Most forms of defined benefit pension schemes are qualifying schemes – for example the Local government and NHS pension schemes;

5) Employers that want to use a defined contribution pension scheme must pay “minimum contributions” – 1% for employers rising to 3% from October 2018. Employees will ultimately have to pay at least 5% (effectively 4% with tax relief applied) from October 2018

6) Staff will still be able to opt-out of the pension scheme should they wish to

7) Employers will have to automatically re-enrol eligible staff into a qualifying pension scheme at 3 yearly intervals

8) The Local Government and NHS Pension Schemes will remain the default qualifying schemes for staff potentially eligible to join these

9) Employers must register their qualifying schemes with the Pensions Regulator and inform staff of pensions auto-

enrolment. They must not encourage staff to opt-out or adopt discriminatory practices.

Whilst the majority of UNISON members are already in an occupational pension scheme, there are many who are not, including members in the education, community and voluntary sector. There is also a risk that employers will opt out of the LGPS or NHS schemes, in favour of cheaper and less favourable schemes for employees.

Whilst these changes affect all employees, there are particular issues for women, particularly Black and disabled women whose lifetime earnings are statistically likely to be lower.

a) Already many women make no independent provision for pensions, relying instead on a state pension which is largely inadequate, and forces them into the welfare and benefits system;

b) Women already make up the greatest proportion of low paid workers, and when forced to choose between paying household bills and making a pension contribution, it is possible that they will choose to opt out of the pension scheme;

c) Nearly six million women work part time in the UK, and many of these will fall below the £8105 earnings threshold for auto-enrolment, excluding them from auto enrolment and the ability to contribute to a quality pension;

d) Women who work variable hours may find themselves meeting the earnings threshold in some months and not others, making their situation complicated and unwieldy.

Conference believes that a decent pension is essential for all women, and calls upon the national women’s committee to work with the NEC, Labour Link, service groups and regional women’s committees to:

i) raise women members’s awareness of the implications of auto-enrolment and the importance of joining a workplace pension scheme;

ii) ensure that branches are equipped to negotiate on quality, safe pension schemes, where staff are not eligible for the LGPS or NHS scheme, and to fight to retain membership of those schemes where they are eligible;

iii) campaign and lobby to ensure that proper consideration is given to the position of low paid women, those working variable hours, women with caring responsibilities and other groups who may be disadvantaged by the proposals.