UNISON has called on the government to rethink its plans to allow universities and colleges in England to opt out of offering membership of the local government pension scheme to new non-teaching staff.
Responding to the formal consultation on the plans, the union said that the government’s plans are unlikely to achieve the savings being talked about, and it “strongly believes” the proposals should be subject to a formal equality impact assessment.
The consultation response pointed out that the LGPS is an affordable scheme, and the costs of its benefits have recently fallen rather than risen.
The answer to the chronic underfunding of public services currently affecting all areas, including education and especially colleges, is not to withdraw benefits negotiated in good faith, where reassurances were given in 2012 that changes would not be made again for 25 years, the union told the government.
And it certainly isn’t appropriate to deny a decent pension scheme to predominantly low-paid women.
In addition, UNISON argued in response to the proposals that:
- if the changes are taken up by colleges and universities in England, it will lead to a two-tier workforce in pensions, with new starters being offered inferior and less cost-effective pensions;
- they are most likely to affect lower-paid members of staff and mainly women – which could lead to a future legal challenge that could overturn the proposal and be costly to employers;
- a proportion of employers closing membership of the scheme to new starters could lead to serious cash flow problems for LGPS funds, with a shortfall of contributions at the same time as the number of pensioners increase;
- an employer who closes the LGPS to future membership could face higher contributions in the future to cover the LGPS pensions that have already been built up for its staff, which would offset any savings achieved by offering a cheaper and inferior scheme to new starters;
- even in the short term, the cost of setting up inferior pension arrangements could reduce any potential savings to the employer;
- although initially only affecting England, there are concerns these proposals could undermine universities and colleges who decide to still provide access to the LGPS for new starters and also put pressure on colleges in Wales, Scotland and Northern Ireland.
On top of that, the union said that all proposed changes to the LGPS should be negotiated through the governance structures of the LGPS.
It argued that the current proposals undermine the work being done by the LGPS scheme advisory board to come up for solutions for LGPS employers that are finding it a challenge to remain in the scheme.