A local authority lobby group has come up with plans that it claims could save the Government £900 million a year in public sector pensions without immediately increasing employee contributions.
According to the BBC, Local Government Employers, which represents the interests of England and Wales’ 375 local Councils, has written to the Communities’ Secretary Eric Pickles with its proposals.
In its letter, the organisation suggests that, starting in two years’ time, workers could be given the choice of upping contributions into their pension schemes in order to maintain their value or pay the same as they do now and get less when they retire.
The LGE claims that the plan, which could affect two million staff, would deliver the savings required, while at the same time minimising the impact on lower paid workers and offering people choice.
The proposals include an increase in the normal pension age from 65 to 66 from April 2014 which, the lobby group attests, would save £300 million a year. The remaining £600 million would come from a rise in contribution rates, with protection included for lower paid personnel.
The Department for Communities and Local Government now has to decide whether to adopt the LGE’s plan or its own, which would see contributions rise from next April, by the end of the month.
But Unison, the largest public sector union, said that it could not accept the proposals.
National secretary for local government Heather Wakefield explained: “We have told the Local Government Group and the employers that we cannot sign up to these plans, which are proposed to raise nothing more than a £900 million ‘tax’ on local government pension scheme members for the government in the short term.”
If accepted, the proposals could undermine the unions’ case among workers for co-ordinated industrial action on Wednesday 30 November as they would no longer face immediate contribution rises while, in many instances, still undergoing pay freezes.
A TUC-led union delegation met Chief Secretary to the Treasury Danny Alexander and Cabinet Office Minister Francis Maude yesterday in the latest round of pension talks.
TUC general secretary Brendan Barber said that there had been no “dramatic change” in the situation and the two sides were still a “long way apart”. He added that future talks would take place at the same time as the unions continued ballot preparations for strike action.
