U Magazine Pensions Special

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THE MAGAZINE FOR ALL UNISON MEMBERS AND THEIR FAMILIES

Industrial action – what does it mean for you?

Pensions:busting the myths

Members say:‘Why I’mvoting yes’

your pensionto protect

Welcome to

DAVE PRENTISUNISON GENERAL SECRETARY

If your employer operates the local government pension scheme,NHS pension scheme or civil service pension scheme then inOctober you’ll receive a ballot paper asking you to takeindustrial action over your pension (see page 3 for more details).

I’m asking you to vote ‘yes’ because proposed changes toyour pension schemes simply aren’t fair.

You pay into your pension throughout your career so that youcan have security and dignity in retirement. Now, ministers wantmost of you to pay more, to work longer and at the end of yourworking life, to receive a worse pension.

Did you know that the ministers we’re negotiating with,without agreement, have already changed for the worse the wayin which those receiving a public sector pension get an increaseeach year to take account of inflation? They have stopped usingthe Retail Price Index which has been used for decades and,from this year, pensions will only increase in line with theConsumer Price Index – a much worse index. This change alonehas reduced the overall value of the pensions by over 10%.

Now, they want to increase your pension contributions byaround 50% if you earn above £15,000. It’s the equivalent on average of a 3% pay cut.

Not a penny of this major increase in your contributions willgo towards improving your pension schemes. Instead it will goto the Treasury. This is an additional unfair tax on public sectorworkers and is deliberately disguised as money for the pensionschemes, which they falsely claim to be unaffordable. The truthis public sector pension funds are cash rich and affordable.On top of this, they want most of you to work longer before you can take your pension in full. Even if you have a protectedpensionable retirement age of 65, this will be torn up. You willbe expected to work until 66, then to 67 and 68 as the stateretirement age increases.

They then want us to agree to new pension schemes, but wehave no idea what the value of any new scheme would be or the transitional arrangements to it.

UNISON working together with other TUC trade unions hasopposed this attack on our pensions.

I want to assure you that we have negotiated with ministers ingood faith and will continue to negotiate. But we also know thatpublic sector workers like you are already enduring pay freezes,the threat of privatisation, reorganisations and cuts in services.It’s not fair to target you any further. You deserve the pensionyou are already entitled to.

And so we have decided to ballot for industrial action. Weonly take strike action as a last resort. We will do everything in our power to ensure no harm occurs to clients, patients andusers of services but we need to send a message that we willstand up to protect our pensions.

We need your support and your help to send this message.When you receive your ballot paper I urge you to vote ‘yes’.

Talk to your colleagues and get them to join UNISON tostrengthen our voice.

Talk to your local branch and your local MP and for moreinformation look at our website:unison.org.uk/protectourpensions

Vote ‘yes’ and together we can send a powerful message to protect our pensions.

Volume 19, number 3 U is published by UNISON – the public serviceunion – and distributed to every member. Non members pay £30 a year.Editorial enquiries The Editor, UNISON centre, 130 Euston Road, LondonNW1 2AY Tel: 0845 355 0845; Textphone 08000967968 Email: [email protected] Advertising Redactive Media Group, 17 Britton Street, London EC1M 5TP020 7880 6200; [email protected] every effort is made to ensure the reliability of advertisers, UNISONcannot accept any liability. Inclusion of advertisements does not imply anyrecommendation. Design www.design-mill.co.uk Print TU ink Paper 100% Post-consumer wastePolywrap Oxo-degradable polythene U magazine is available in audio format by contacting Pat Payne, UNISON communications, at the address above.

TALK TO US: PHONE 0845 355 0845Monday to Friday 6am to midnight and Saturday 9am to 4pm. If you want to change membership details, call this number, visit the website or get in touch with your branch or region. Calls may be recorded for training purposes. Textphone 08000 967 968VISIT OUR WEBSITE: WWW.UNISON.ORG.UK

PENSIONS EDITION

2 U MAGAZINEPENSIONS EDITION 2011

BALLOT OPENS 11 OCTOBERVOTE YES TO PROTECT YOUR PENSION

PENSIONS EDITION 2011U MAGAZINE 3

Pensions planWhat you need to know about the UNISONindustrial action ballot over pensions.

actnowFind out more about pensions and the threat to them at:unison.org.uk/protectourpensions or on the UNISON Facebook pageat facebook.com/unisontheunion.Find out how to get involved in thecampaign at: unison.org.uk/pensions/getinvolved.asp‘ ’We’ve been patient, we’ve

co-operated. But therecomes a time when we say:‘Enough is enough’”.

Will I get a vote?If your employer operates the LocalGovernment Pension Scheme, the NHS Pension Scheme or the Principle Civil Service Pension Scheme there will be separate ballots over possible industrial action.

The pension schemes are part of yourterms and conditions at work.

If you’re in a job with some other pension scheme – if you work for a privateutility company or many of the pre-1992universities for instance – you won’t be partyto a dispute about the three main publicservice schemes and you won’t be balloted.

You also won’t be entitled to vote if you’realready retired or if you will have leftemployment before 30 November.

If you work in Northern Ireland, and youhave just taken part in a separate vote onindustrial action you won’t be taking part in this ballot.

What’s the ballot timetable?Ballot papers will start being sent to relevantmembers on 11 October and the ballotcloses on 3 November.

If you haven’t received a ballot paper by17 October, and you think you should beincluded in the ballot, you can contact theballot helpline on 0845 355 0845. Youshould do this before noon on 31 October.

Are other unions balloting for action?Most of the unions with members in publicservice pension schemes are balloting overpossible action.

If members vote ‘yes’ toindustrial action, what happens next?The first day of action is planned for 30 November 2011, starting at midnightand continuing for 24 hours but you shouldnot actually take part in industrial actionuntil called to do so by the union. You andyour branch will be notified if any furtheraction is planned.

As always, UNISON will make sure thereis essential services emergency cover wherenecessary.

Shouldn’t strike action be a last resort?Yes – and it is. UNISON never asksmembers to strike lightly: we know it is aserious step. But as general secretary DavePrentis said when announcing the ballot:We’ve been talking to ministers for eightmonths.

“We’ve been patient, we’ve co-operated.But there comes a time when we say:‘Enough is enough’”.

What are my rights if I go on strike?Employees are protected from dismissalduring the first 12 weeks of any lawful,balloted, official industrial action. Duringthese 12 weeks the protection is absolute.Any dismissal, regardless of how long theemployee has worked, or their age, isautomatically unfair unless a tribunaldecides the dismissal was not to do with the industrial action.

If employers decide to deduct pay fromthose taking strike action, your branchshould seek a local agreement that this is no more than one day’s pay for a one-day strike.

If you are absent on sick leave when astoppage of work starts, you keep your rightto statutory sick pay during the industrialaction. If you report sick on the day theaction starts, the employer is likely to maketheir own judgement on whether you are on sick leave or on strike.

UNISON does not regard anyone whotakes annual leave on strike days to betaking part in the strike.

What should I do if I’m not involved in the ballot or any action?If you’re not taking part in the strikebecause you’re not part of the dispute, youcan still support your colleagues who are.

Show your support for public sectorpensions by talking to friends andcolleagues about the campaign, writing toyour local paper and wearing a sticker onthe proposed day of action – 30 November.


Jane Carolan, housing workerfrom GlasgowI think it’s completely unfair particularly towomen. We always knew there was going tobe equalisation in the state pension age butthe rate at which it has accelerated meansthat I personally know women who startedin local government when they were 18,who’ve worked in local government for 30years and who are now facing another 18years before they get a pension. They’regoing to have a working life of 48 years. I think that it’s completely unfair and thechanges that are coming in mean that for all of that they’re going to get a much worse pension.

Certainly the people that I’ve beenworking with have seen that the workforcehas been reduced, they’re trying to do thesame job with less resources, they haven’thad a pay rise in some time, so the fact thattheir pensions are being changed in such away and they face such a long time beforethey get them really means that this changeto their terms and conditions is the laststraw. They really now think you cannotjust say that it’s unfair and do nothing – we have to actually make a stand on it.

Remembering back to when I wasstarting work, people actually encouragedyou to join the scheme because they wouldtell you it was a good deal. If there are notpeople actively in the workplace promotingit then I think it’s going to be more difficultto keep people coming into the scheme.

I think that with a lot of people whowork in public services the fact that therewas a decent pension at the end of the day did count as part of the overall

remuneration package. They might not havecalled it that, but that’s what they thoughtabout it. If the pensions aren’t there, it’sgoing to be much more difficult to attractpeople into public services and that’s goingto be a problem.

Chris Tansley, a social workerfrom NottinghamThe main reason I’m voting ‘yes’ is that thisis a tax on public sector workers. I think it’scompletely unfair. I don’t see why we shouldhave to pay for the state of the economy,particularly when we didn’t cause it in thefirst place.

It’s quite clear that the extra 3% thatthey want to get from public sectorworkers isn’t going to go back into the pension schemes, so I think their argument that it’s because of longevity of the schemes falls flat on its face.

If they were concerned about the state of the schemes, they’d be saying that theywanted additional money to put into them,but the money’s going straight into theTreasury coffers. It’s going to offset council tax going down. It’s completelyunfair and unjustified.

What worries me is the state of thepension scheme. The government has not, I don’t think, woken up to the factthat the local government pension scheme,which is the one I’m in, is a funded schemewhere the investments from that are thefourth highest investments in industry and commerce in this country. If it doesstart to collapse, which is my fear, it’s going to have a hugely detrimental effecton the economy.

Gloria Hanson, informationreferral officer/adult social care worker from LondonI’ll definitely be voting yes, and to everyonethat I know I’ll be saying you need to getout and vote.

You might not think you need it now, if you’re young – but just think that theaverage pension for a woman in the localgovernment pension scheme is £59 a week.How can you live on that? When you’vebeen working all your life and paying into a pension you deserve more than that.

I’ll also be encouraging members not toleave the scheme, even if the contributionsare higher, because if the scheme collapsesthere’ll be a knock-on effect.

If too many people opt out of the schemeand it goes down, it’s going to affect everysingle man, woman and child.

Carole Maleham, a driver for museums and arts inRotherhamI’ll be voting ‘yes’ because I entered into an agreement with regards to my pension and, if it’s broken, there should be trouble.

I should be looking forward to myretirement – not dreading it.

I’ll get £3,000 a year – because I workedpart time, I wasn’t allowed to join thepension scheme for years, and then Icouldn’t afford to buy extra years because I was on such low pay.

They say you should save towards yourretirement – I was saving towards it withmy pension!

I can see myself going to work on myzimmer frame.

Why I’m voting

YESMembers explain why they’ll vote yes in the ballot for industrial action.

CHRIS

JANE


Eleanor Smith, theatre nursefrom Birmingham and UNISON’spresidentI’m Eleanor Smith, I work in the healthservice and I’m a theatre nurse. I came in asa student when I was 19 and I’ve been there30-odd years.

But now, what I thought was myretirement age is going to be extended. Notonly that, but they actually want to makeme pay more and yet I’m not actually goingto see that additional money in my pensionwhen I retire.

And what about the next generation?Why are they going to have to struggle more to be able to have a pension? It’s notacceptable to say there isn’t enough money,when there is.

We’ve already been through the pensionschoice exercise in the NHS, which wediscussed and negotiated with the lastLabour government to make the NHSscheme affordable, so why are ministers nowsaying that it’s not? It’s just that they want todip their hands in to help pay off the deficit,which we didn’t cause in the first place.

As public sector workers, because we’realways going to have to rely on the taxpayer topay our wages – I’m a taxpayer myself – ourwages will never be hugely inflated, so one ofthe benefits that we had was to have a decentpension and now they want to take that away.

When I came into the nursing professionit was because it was a vocation and it wassomething I really wanted to do – it wasn’tabout the money, but the one thing mymum always said was: “At least you’ll have a good pension at the end of it”, and nowthat’s going to be taken away.

Clare Williams, health service workerI’ll be voting yes in the ballot because as apublic sector worker what we’re facing isunprecedented. To be looking at increasingour contributions by over 50% whilstexpecting people to work longer iscompletely unacceptable.

Public sector workers are working extremelyhard, they didn’t cause the deficit and manyreally, really cannot afford any more financialpressures or an increase in their pensions.

Linda Hobson, critical care nurse from NewcastleWe shouldn’t have to bear the brunt of thebanking crisis with a 50% increase in ourcontribution rates, and none of that extramoney going back into the pension scheme.

I’m a part-time worker but I’m notprotected from increased contributions. I’ll pay the same higher contribution rate as if I worked full-time.

I can tell you that nurses are extremelyangry. Pensions is something they seem sopassionate about.

In critical care we work 12 and a half hourrotational night and day shifts. It’s hard. It’sthe thought of the pension that’s keeping usgoing. But to expect us to still be doing thoseshifts at the age of 67 just seems unfair.

I’m not militant – but all of us nurses arevery, very angry. We know you have to drawthat line, and that means voting yes. Incritical care we know that the services thatneed to be protected will be protected. Butnurses of all ages, even ones who are comingup to retirement age who won’t be affectedthemselves, are supporting this campaign.

THE REAL PENSION FACTS• If it closed today, the local

government pension scheme couldstill pay all its liabilities for 20 years.

• The Treasury gets £2bn more inNHS pensions contributions than it pays out in benefits every year.

• Proposed pension contributionincreases could lead 350,000people to opt-out of public servicepension schemes.

• The average pension for localgovernment workers is around£4,000 a year – hardly gold-plated.

• The average pension for NHSworkers is £7,000 a year – hardlygold-plated.

• The bosses of Britain’s largestcompanies have an averagepension of £224,121 a year – the real gold-plated pensions.

• The bosses of Britain’s largestcompanies have an averagepension 29 times bigger than theaverage public sector pension.

• Half the women pensioners in theNHS scheme receive a pension ofless than £3,500 a year – hardlygold-plated.

GLORIACAROLE ELEANOR CLARE LINDA

PHOTOS: SARAH TURTON & AMANDA KENDAL (CAROLE)

MYTH – People are living longer whichmeans they’re claiming their pensions forlonger – this needs to be addressed.BUSTED – The schemes were revised to takeaccount of this three years ago – so schemebenefits and costs are now 25% lower.

In addition, life expectancy has increased but less so for manual workers and the low paid.

MYTH – There’s a big public sectorpensions deficit that has to be repaid. BUSTED – There is no funding gap – thepublic sector schemes were assessed for longterm risk and adjusted accordingly threeyears ago and are now very secure.

Both the local government pensionscheme and NHS pension scheme arecurrently cash rich with income farexceeding outgoings – some £2 billion in the case of the NHS pension scheme.

MYTH – The proposals mean that thoseearning over £15,000 pay around 3% moreeach month – that’s not very much is it? BUSTED – 3% of your pay is a significantchunk of income. Pension scheme memberscurrently pay around 6% of their salary intotheir pensions – adding another 3% to thismeans increasing the payments by aroundhalf again. The Local GovernmentAssociation is even worried that this wouldlead public sector workers to opt out ofpension schemes and threaten theiraffordability.

MYTH – Public services and public servicepensions are causing the financial crisis.BUSTED – It was the banking sector’sreckless risk taking and excessive greed thatcaused this global recession.

MYTH – We’re all in it together. Everyonehas to make sacrifices right now – why notpublic sector workers?BUSTED – We are all facing cuts to ourpublic services – on top of this publicservice workers are facing unprecedentedjob cuts and a pay freeze. Is it fair to askthem to pay an average 3% more from their salaries on top of all that in return for a pension with worse benefits?

We will all end up paying more tax if people drop out of the scheme to end up relying on the state in their old age.

MYTH – It’s not fair, why should the publicsector get good pensions when the privatesector doesn’t?BUSTED – The average director of a FTSE100 company has a final salary pensionworth £3.6m or £174,963 a year, while theaverage occupational pension generally is£9,500 a year and the average public servicepension is £7,800 a year. That’s the realunfairness.

UNISON thinks everyone deserves anadequate pension, including workers in the private sector. We should improve badschemes rather than make good ones bad.

Providing adequate pensions means thatfewer people will be receiving welfarehandouts after retirement, which would costthe taxpayer more money in the long run.

MYTH – Public sector workers have it toogood with huge pensions. BUSTED – The average public servicepension is around £7,800 a year, for womenworking in local government the average is£2,800 a year, while the median for womenworking in the NHS is £3,500 a year: hardlyhuge pensions.

Saving towards an occupational pensionin many cases means a person is receivingfewer welfare benefits during retirement,saving the taxpayer money.

MYTH – Taxpayers are paying for publicservice workers’ pensions. That’s not fair. BUSTED – Everyone’s taxes are used to payfor all public services – stethoscopes inhospitals, the salaries of primary schoolteachers, people to change the light bulbs in street lamps, and part of these people’spay is their pension.

A pension is part of someone’s salarypackage and is no different than an annualsalary, a car, or the London weightingallowance. It’s not fair to change something ina job contract after someone accepted the job.

One in five people working in the UK works in public services. They aretaxpayers too.

MYTH – Public service workers retire at 60. BUSTED – The normal retirement age inmany of the public service pension schemesis already 65.

Raising the retirement age hurts somepeople more than others. In general we’reliving longer, but that doesn’t meaneveryone will have the same quality of life.Many public service workers have jobs thatare physically demanding or stressful,making it difficult or even impossible tocontinue working into old age. Similarlymany low paid workers simply don’t havethe option of retiring early because theycan’t afford it.


Pensions: busting the mythsThreats to public sector pensions could mean that your retirement is at stake – make sure you can tell fact from fiction.

We cut through the jargon so you can understand the pension debate better.


Defined benefit (DB) pension schemeA scheme that commits to paying aspecified amount to each member uponretirement depending on years of serviceand salary. Both final-salary and careeraverage (CARE) schemes are defined benefit schemes.

Defined contribution (DC) schemeA pensions scheme where how much youpay in each year is defined, but the pensionyou get at the end cannot be predicted.

Basically, someone retiring when thestock market is high is likely to get a betterpension than someone retiring when themarket is low. Charges can mean that forevery £1 paid in, as little as 40p is availableto buy a pension.

Final-salary schemes These are schemes where your pension is a proportion of your pay near to yourretirement. The Local Government Pension

Scheme and the NHS Pension Scheme are final-salary schemes.

Funded schemeA pension scheme where contributions areput into a fund, invested and paid out aspensions and benefits as they fall due. TheLocal Government Pension Scheme is theonly funded public service pension scheme(compared with pay-as-you-go schemes).

Index-linked pensionsPensions are increased each year by thecost of living, usually measured by theRetail Price Index or the Consumer Price Index.

The government decided to link publicsector pensions to the CPI instead of theRPI from April 2011. The RPI is higherthan the CPI because it includes the costs of housing so in simple terms members havereceived an increase of around a third lessthis year.

Pay-as-you-go (PAYG) schemesA public-sector pension scheme wherebenefits (pensions) are paid out of current income (contributions). There is no separate fund with money in it.

These are also known as unfundedschemes.

The NHS Pension Scheme is a pay-as-you-go scheme.

PENSIONS IN PLAIN ENGLISH

actnowIf you are eligible to vote in thepensions ballot why not get yourpicture taken holding up the I’m votingyes poster over the page. You maywant to ask colleagues, friends andfamily to be in the picture with you. Send the picture in to us [email protected] and we’ll add it to the vote yes picture gallery onthe UNISON website.

I’m�votingYES

to�protect�my�pension

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