The Welsh Local Government Association and the Joint Council Wales (JCW) have both agreed a statement in defence of the Local Government Pension Scheme (LGPS) and in opposition to the Chancellor of the Exchequer’s proposals for substantial rises in employee contributions to be phased in from April 2012.
Cllr Gordon Kemp, (Vale of Glamorgan), WLGA Employment Spokesperson and Chair of the JCW Employers side said:
“Local government officials and trades unionists alike are concerned that the unique position of the LGPS has been completely ignored in the debate surrounding the cost of public sector pensions. The LGPS is actually a funded scheme, which means it is supported in its entirety by employee and employer contributions – the Treasury is not required to fund any shortfall as it does in a number of other public sector schemes. Therefore, there would be no “saving” to the Treasury as a result of increasing employee contributions. .
WLGA and JCW Members are concerned that the proposed increases will lead to opt-outs from the scheme – far greater than the 1% envisaged by the Government, thus threatening the financial viability of individual local government schemes across the country, which is in complete contrast to the Government’s stated objectives. On behalf of both bodies I have written to the Chancellor of the Exchequer, the Secretary of State for Communities and Local Government and the Chief Secretary to the Treasury to press the case against the proposed increases.”
Dominic MacAskill, speaking on behalf for the Local Government trade unions added:
“The Westminster government’s assertion that public sector pensions are gold plated and need reforming is a myth, as the average local government pension on retirement is only £4,200 for men and £2,870 for women.”
“Another myth is that these pensions are not affordable, the Local Government Pension Scheme has a total of over £150 billion in investments with income from investments and contributions exceeding pension payments by £4-5 billion every year.”
“However, if the government has its own way then a predominately low-paid workforce will face a 50% increase in their pension contributions for a 50% reduction in benefit and a retirement age of 67 years rising to 68 years. The trade unions conducted a survey that demonstrated that if these contribution rises were implemented then between 39% and 53% of members would opt–out of the scheme, depending on how the increases were distributed amongst different salary bands, this would create a funding crisis where one didn’t exist before.”
“That is why I am pleased that the Welsh Local Government employers have joined with the trade unions in arguing against these destructive changes and stating in no uncertain terms, if it ain’t broke, don’t fix it!”
