Proposed changes to the Social Housing Pension Scheme will place members’ future financial security in jeopardy, and pensions at rock bottom, UNISON warned today.
The changes, which are the subject of an ongoing consultation, are being mooted as a solution to a £1bn funding deficit, and have the potential to severely impact on the viability of pension funds for scheme members. They include:
Introducing a 1/120th CARE* option. Adopting the consumer price index (CPI) instead of the retail price index (RPI) as a means of reducing costs. Increasing contribution rates unnecessarily which may result in fewer new scheme members.
The union has slammed the pension changes and the new 1/120th option, saying the resulting pension is too low to viably live on.
Simon Watson, UNISON national officer for housing associations, said:
“Many housing associations are not in a financial crisis, so their proposals to pass on the costs of addressing a £1bn funding deficit are utterly unfair, and place the future financial security of scheme members in jeopardy.
“A pension is supposed to provide financial security for the future, but the new 1/120th career average option being offered will end up yielding pension payments that are so low they are barely worth having.
“Social Housing Pension Scheme members have an opportunity, through this consultation, to let their employers know what they think, and UNISON will support them in ensuring they are not left high and dry as a result of financial problems they have not caused.”
UNISON is calling for:
Housing Associations Employers to provide a decent quality pension scheme for their staff This means a good career average or final salary scheme, or (as a fall back) a defined benefit scheme that meets the Pensions Quality Mark Plus standard Employers should also explore using salary sacrifice to keep the cost of pensions down Low paid staff that have had little or no pay increases should not be expected to pay increased pension contributions
The proposed changes will be the topic of discussion at a seminar being hosted by UNISON this Thursday (15 November).
ENDS
CARE stands for career average revalued earnings: Scheme members’ pensions are calculated as a percentage of the average of all their pensionable earnings for each year that they contributed to the scheme – not just their pensionable earnings near retirement, as in a final-salary scheme.
Revalued earnings: all those earnings will be increased every year from the year they are earned until retirement.
