Ministers rumbled over misleading pensions figures

Ministers' misleading claims that their proposals for public sector pensions will mean better retirement packages for some have been exposed by PCS using the government's own figures.

On 2 November, when the government made its latest offer, prime minister David Cameron told the Commons: "I can tell the House that low and middle-income earners will actually get more from their public sector pensions."

Publishing a document, 'Public Service Pensions: good pensions that last', chief secretary to the treasury Danny Alexander also claimed on the same day: "...we are offering the chance of a significantly better pension at the end of it for many low and middle income earners."

The document makes a similar claim and used case studies to illustrate the point.

But a pensions calculator placed on the civil service website by the Cabinet Office last week – then hurriedly removed, but not before we saved a copy – confirms the proposals deliver year on year lower pensions than existing schemes.

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Ministers must correct misleading figures - Mark Serwotka

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Case study B in the Treasury document is a civil servant on £22,000 a year with 18 years' service who will be 40 when the new scheme is introduced in 2015.

The figures given show retiring at 60 under the existing scheme and working just 18 months longer under the new scheme would give them the same pension of £9,100.

But, as reported by Channel 4 News last night and on its FactCheck blog, the calculator gives a very different outcome to the same example.

It shows the Treasury underestimates the case study's pension and that even working four years more, they would still get less. The calculator shows: pension at 60 under the existing scheme, £13,932; retiring at 64 years under the new scheme, £13,791.

The total pension the civil servant would miss out on under the new scheme by working to 64 would be £87,888 over a normal retirement, including:

• Four years of pension at £13,932 a year (£55,728)
• Additional pension by working to 64 of £1,608 a year, totalling £32,160 over a normal retirement of 20 years.

The same civil servant will still be required to pay extra pension contributions of at least £704 a year from April 2015 onwards – including the additional four years working until 64. This totals £16,896. The switch in indexation from RPI to CPI would also cost them around £21,500 over a normal retirement.

The calculator confirms we are right to oppose the plans because civil servants will be required to pay more and work longer for less in retirement.

From the outset the government has tried to mislead the public and public servants. This confirms ministers have also given misleading and inaccurate information to parliament and they must correct it and apologise.

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Update, 2pm 23 November 2011: John McDonnell MP has this afternoon raised a point of order in the Commons, citing these serious discrepancies and calling on ministers to return to the House to explain them.

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• Download our Fair Pensions for All pamphlet (pdf)
• Read PCS's alternative to the cuts
  

Strike

The legal definition of a strike in the Employment Relations Act 1996 is:(a) the cessation of work by a body of employed persons acting in combination, or (b) a concerted refusal, or a refusal under a common understanding, of any number of employed persons to continue to work for an employer in consequence of a dispute, done as a means of compelling their employer or any employed person or body of employed persons, or to aid other employees in compelling their employer or any employed person or body of employed persons, to accept or not to accept terms or conditions of or affecting employment"

The strike action on 30 November is 'protected industrial action' because it results from a legal industrial ballot. Although a strike, or other form of industrial action, is a breach of contract of employment, which would normally give the employer the right to terminate, dismissal is unfair if the action was protected. 

You have right to Strike

30 November events

Up to 3 million workers inclusing PCS members are expected to take strike action on 30 November in the largest co-ordinated action ever seen in the UK. Rallies and marches are being organised across the country in support of the strike.

Events taking place will be added below (in alphabetical order) as and when details become available – all PCS members and supporters are encouraged to take part.

Events

Aberdeen – 11am, assemble at the St. Nicholas Graveyard, Union Street, AB11 6BH. 12 noon, rally at Castlegate, Castle Street, AB11 5BB. 1.30pm, social gathering at the ATUC-Social Club, 13 Adelphi, AB11 5BL.

Aberystwyth – 11.30am, assemble at the top of Penglais Hill, by the entrance to the Cwrt Mawr student village, SY23 3AN, for march to 12.30pm rally at Morlan Centre, Queen’s Road, SY23 2HH.

Aylesbury - 10.30am, march from Kingsbury Square, HP20 2HT, to Railway Club, Penn Road, HP21 8HN.

Banbury - 11am, march from Banbury Town Hall, Bridge Street, RG1 8AG, to join Oxford Rally.

Barnsley – 10am, demonstration in Churchfield road, S70 2JT. 10.30am, rally at YMCA, Blucher Street, S70 1AP.

Basingstoke – 2pm, assemble at Basingstoke County Offices, London Road, RG21 4AH, for march through the town followed by a rally.

Bath – 1pm, assemble in Royal Victoria Park, Marlborough Lane, BA1 2NQ, for 2pm march and 3pm rally.

Bathgate – 10am-2pm rally at Fairway Hotel, EH48 1BA.

Bedford - 10am, rally at Bedford Congress Hall, Commercial Road, MK40 1QS.

Belfast – 11.45am, four feeder marches assemble at: Central Railway Station, East Bridge Street, BT1 3PB; Mater Hospital, Crumlin Road, BT14 7AB; Royal Victoria Hospital, Grosvenor Road, BT12 6BA; City Hospital, Lisburn Rd, Belfast, County Antrim BT9 7ER; University of Ulster Art College, Donegall Street, BT15 1ED. They will march to a rally at 1pm at Belfast City Hall, Donegall Square, BT1 5GS.

Birkenhead - 10.30am, assemble Birkenhead Park Gales, CH41 3JU for march and rally.

Birmingham – 11.30am, assemble for march in Lionel Street, B3 1AP. Followed by rally at the National Indoor Arena, King Edwards Road, B1 2AA, with doors opening at 12.30pm. 

Birmingham, Bordesley Green – 10am, rally at Heartlands Hospital, Bordesley Green East, B9 5SS.

Birmingham, Cotteridge – 9am, rally at Cotteridge Church Centre, Cotteridge Island, B30 3EJ, before proceeding to Selly Oak Rally for 10am.

Birmingham, Handsworth - 10am, rally by the Library, Soho Road, B21 9DP.

Birmingham, Selly Oak - 10am, rally by the University Main Gate, near Fire Station, Bristol Road, B5 7SW.

Blackburn - 11.30am, assemble outside old Town Hall, King William Street, BB1 7DY, for 11.45 march around town centre. 12.30pm, rally back at old Town Hall.

Blackpool – noon, assemble opposite St John’s Church, Cedar Square, Blackpool FY1 1BP, for 12.15pm march. 1.15pm, rally in the Ruskin Hotel, Albert Road, FY1 4PW.

Bolton - 11am, rally at Victoria Square, BL1 1RU. 12.30pm march to Derby Ward Labour Club, Deane Road, BL3 5AH, for post strike rally at 1pm.

Bournemouth – noon, assemble at Central Library, the Triangle, BH2 5RQ, for 12.30pm march through the town centre. 1.30pm, rally at Royal Bath Hotel, Bath Road, BH1 2EW.

Bradford - 11am, rally at Centenary Square, BD1 1HY.

Brighton – 11.30am, assemble at Victoria Gardens, BN2 1UG. March to The Level, BN1 4SB, for rally at 1pm.

Bristol - 11am, assemble at College Green, BS1 5TA. March to Castle Park, Castle Street, BS1 3XD.

Bromsgrove – noon, assemble outside the Post Office, High Street, Bromsgrove B61 8AA, for rally.

Cambridge – 10am, feeder marches start from Addenbrookes Hospital, CB2 0SZ, and The Government Office for East of England, CB2 8DR. 11am, feeder march from the Shire Hall, CB3 0RH. Noon, march from Parker’s Piece, CB2 1AA, around the city centre followed by rally at Parker’s Piece after the march. 7.30pm, social event at the Portland Arms, Mitchams Corner, CB4 3BA, with bands and free entry for strikers.

Canterbury – 10am-3pm, rally at Abbots Barton Hotel, 36 New Dover Road, CT1 3DU.

Cardiff - noon, assemble outside Cardiff City Hall, Gorsedd Gardens Road, CF10 3ND, for march to a rally at 1pm at the SWALEC stadium, Sophia Gardens, CF11 9XR.

Carlisle - noon, assemble at Carlisle Cross in front of the Old Town Hall, CA3 8JE, for march and rally.

Chatham – 12.30pm, rally at Command House, Gun Wharf, Dock Road, ME4 4TX.

Chester - noon, assemble outside the University, Riverside Campus, on Castle Drive, CH1 1SL for march to Guildhall, Watergate Street, CH1 2LA, stopping at the Chester Cross junction, CH1 1PD, at 1pm for a protest. 1.30pm, rally at Guildhall, CH1 2LA.

Chesterfield – 11am, assemble at Rykneld Square, by Crooked Spire, S40 1SB. March to Club Chesterfield (formerly Chesterfield Miners Welfare), Chester Street, S40 1DL, for rally at 12.30pm.

Chippenham - 11am, rally at Chippenham Sports Club (Chippenham Town FC), Bristol Road, SN15 1NH.

Crewe – 12.30pm, rally at Municipal Square, Earle Street, CW1 9TL.

Derby – 11.15am, march from Silk Mill, Silk Mill Lane, DE1 3AF, to Market Place, DE1 3AE, for rally in the Marquee at noon.

Derry - 1pm, rally at the Peace Bridge over the River Foyle.

Dorchester – 10am, assemble at Dorset County Council, County Hall, Colliton Park, DT1 1JF, for march at 10.30am through the town. 11am, rally at War Memorial and South Street, DT1 1DE.

Dover – noon, rally at St Marys Parish Centre, Church Street, CT16 1.

Dudley - 10.30am, assemble outside Council House in Coronation Gardens, Priory Road, DY1 1HF, for march to rally at Station Hotel, Castle Hill, DY1 4RA.

Dumfries – 10am, rally outside the Council Offices, English street, DG1 2DD. 10.45am, indoor rally at the Cairndale Hotel, English St, DG1 2DF.

Dundee – noon, assemble at the west gate of Dudhope Park, DD1 5RE. March to rally in City Square, DD1 3BA for 12.30pm.

Eastbourne – 10.30am, assemble at Bandstand, Grand Parade, BN21 3AD, for photo and media presence. 11am, rally in the Unite Eastbourne Centre, Grand Parade, BN21 4DN.

Edinburgh - 11.30am, assemble outside Usher Hall, Lothian Road, EH1 2EA.

Exeter – 11am, assemble for march at Cathedral Green, EX1 1HS. 12.30pm, rally at Flybe Stand, St James Park, EX4 6PX.

Falkirk - noon, St Martha's Hall, Hope Street, FK1 5AT.

Gateshead - 10.30am, assemble at Gateshead Civic Centre, NE8 1HH. Noon, rally at Spillers Wharf, Newcastle, Tyne and Wear, NE1 3UF.

Glasgow – 12.30pm, march assembles Shuttle Street, G1 1QA. 1.15pm, rally at Barrowlands Ballroom, 244 Gallowgate, G4 0TT.

Glenrothes - 10.30am, rally outside Fife House, North Street, KY7 9TB.

Gloucester – 12.30pm, march from Shire Hall, Westgate Street, GL1 2TJ. 2pm, rally at Gloucester Park, Park Road, GL1 1LH.

Halifax - 10am, assemble at Town Hall, Crossley Street, HX1 1UJ.

Hastings – 11.30am, assemble at Hastings Pier, 34 White Rock, TN34 1JY, before marching to the Town centre. Rally, to take place after the march, in Robertson Street, TN34 1H; between Debenhams and the Havelock public house.

Hertford – 11.30am, march from Hartham Common, Hartham Lane, SG14 1QR, to County Hall, SG13 8DZ, for a rally at 1.30pm.

High Wycombe – 12.30pm, march from The Hub, Easton Street, HP11 1NJ, past Bucks New University, the Police Station, Post Office and then back to The Hub.

Huddersfield - 10.30am, assemble at St George's Square, HD1 1JA, march around the town centre followed by a rally.

Hull – 11am, rally in Victoria Square, HU1 3DG.

Inverness – 12 noon, short march and rally at Mercure Hotel, Church Street, IV1 1QY.

Ipswich – 11.30am, assemble at Russell Road, IP1 2AG, for march to the Cornhill, IP1 1EJ, for a rally at 12.45pm.

Kings Lynn – noon, march from outside the tax office, County Court Road, PE30 5EW, to the top of Purfleet, PE30 1ES.

Kingston – 9.30am, assemble outside Kingston University on Penrhyn Road, KT1 2EE, for march at 10am. 11am, rally at Richard Mayo Centre, United Reformed Church, Eden Street, KT1 1HZ.

Lancaster  - 11am, assemble at Dalton Square, LA1 1PL, for a march departing at 11.30am. 12.30pm, rally in Market Square, LA1 1HT.

Leatherhead – 10am, assemble for march outside Red House Gardens, KT22 7AH. 11am, rally at Leatherhead Theatre, 7 Chuch Street, KT22 8DN.

Leeds – 10.30am, rally at Woodhouse Moor, then march to rally at Art Gallery. Noon, rally outside the Art Gallery, The Headrow, LS1 5RG.

Leicester – 11am, assemble for march at the top of High Street, LE1 4JB, starting at 11.30am. 12.30pm, rally at The Athena, Queen Street, LE1 1QD.

Lincoln – 11.30am, assemble at car park on Tentercroft Street, LN5 7DB, for march. 12.30pm, rally at Drill Hall, Free School Lane, LN2 1EY.

Liverpool – 11.30am, assemble at Derby Square, L2 9XW, and Pier Head, L3 1JR. 12.00, march to St Georges Plateau, L1 1JJ for rally at 1pm.

Llandrindod Wells – 11am, assemble a Theatr Powys, Tremont Road, LD1 5 EB, for march through the town. Noon, rally with soup and roll lunch at the Pavilion, Spa Road, LD1 5EY.

London, central - noon, assemble at Lincoln's Inn Fields, WC2A 3PE. March to the Victoria Embankment, WC2N 6NU, for a rally at 2pm.

London, Croydon – 10.30am, assemble in Queen Elizabeth Gardens, Park Lane, Croydon, CR9 3JY, for rally and march.

London, Ealing – 10.30am, assemble at Ealing Town Hall, W5 2BY.

London, Euston - Noon to 2pm, protest outside UCLH, 235 Euston Road, NW1 2BU.

London, Greenwich - noon to 2pm, protest outside Queen Elizabeth Hospital, Stadium Road, Greenwich, SE18 4QH.

London, Hackney - noon, protest outside Hackney Town Hall, Mare Street, E8 1EA.

London, Haringey - noon, protest outside Haringey Civic Centre, High Road, N22 9SB.

London, Harrow - noon to 2pm, protest outside Northwick Park Hospital, Watford Road, Harrow, HA1 3UJ.

London, Islington - noon, protest at Islington Green, N1 8DU.

London, Lambeth - noon, protest in Windrush Square, SW2 1JG.

London, Lewisham - noon to 2pm, protest outside Lewisham Hospital, Lewisham High Street, SE13 6LH.

London, Paddington - Noon to 2pm, protest outside St Mary’s Hospital, Praed Street, W2 1NY.

London, Tooting - Noon to 2pm, protest outside St George's Hospital, Blackshaw Road, Tooting, SW17 0QT.

London, Tower Bridge - noon, protest outside Greater London Authority, Westminster Bridge Road, SE1 2AA.

London, Tower Hamlets - noon, protest outside Tower Hamlets Town Hall, 236 Cable Street, E1 0BL.

London, Westminster - noon to 2pm, protest outside St Thomas’ Hospital, Westminster Bridge Road, SE1 7EH.

Luton - 10am, assemble at Manor Park, B5 7SW, for march to rally in St George’s Square, LU1 2NG.

Maidstone – 1pm, rally at County Hall, Sandling Road, ME14 1XD.

Manchester - 11am, assemble at Liverpool Road, off Deansgate, M3 4JR, and march to a rally at 12.30pm in Whitworth Park, Oxford Road, M15 6ER.

Merthyr Tydfil – 11am, rally at Civic Centre, Castle Street, CF47 8ZA.

Milton Keynes – noon, rally outside the Civic Offices, Silbury Boulevard, Milton Keynes, MK9 3EJ.

Mold – 10.30am, march from Council Offices, CH7 6LG, to the former Kwik Save car park, Chester Road, CH7 1UF, for rally at 11.00am.

Motherwell - noon, rally at North Lanarkshire council building, Windmillhill Street, ML1 1AB.

Newcastle – noon, rally at Spillers Wharf, Tyne and Wear, NE1 3UF.

Newry – 1pm, rally at City Hall, Bank Parade, BT35 6HR.

Norwich – 11am, assemble at City College, Ipswich Road, NR2 2LJ. 11.30am, march to City Hall, St Peters Street, NR2 1NH, for rally at 12.30pm.

Nottingham – 10.30am, assemble at Forest Recreation Ground, outside the Pavilion, NG7 6ND, for march at 11.30am. 12.30pm, rally at Royal Albert Hall, North Circus Street, NG1 5AA. Rally is ticketed.

Oldbury – 10.30am, assemble outside Sandwell Council House, Freeth Street, B69 3DE.

Oldham – noon, assemble on Albion Street, close to Iceland, OL1 3AB. 12.30pm, march around the town centre. 1pm, rally in Albion Street, M35 0FP.

Oxford – 1.30pm, three feeder marches depart from: the corner of Gypsy Lane and London Road, OX3 0BL; Manzil Way, OX4 1GE; Oxford Brookes School of Health, Marston Road, OX3 0EP. 2pm, rally Cowley Place, OX4 1DY.

Peterborough – 10.30am, march from Pleasure Fair Meadow Car Park, Oundle Road, PE2 8AT, to a rally in Laxton Square.

Plymouth - 11am, assemble outside Guildhall, PL1 2AA. Noon, march through the city centre to rally at Holiday Inn, Armada Way, PL1 2HJ.

Portsmouth - 12.30pm, march from Guildhall Square, PO1 2AB. 1.30pm, rally at Guildhall Square, PO1 2AB.

Preston – 11am, assemble at Avenham Park, PR1 3TD. 11.30am, march to Flag Market, PR1 3NU, for rally at noon.

Reading – 11.30am, assemble at Irish Centre, Chatham Street, RG1 7HT, for march through the town to King’s Meadow, RG1 8AG.

Rotherham – 10am, assemble at Rotherham Town Hall, Moorgate Street, S60 2RB. 10.30am, march to rally in All Saints Square, S60 1QX.

Salford - 11.30am, assemble at Bexley Square to march to rally in Manchester. M3 6BZ.

Sheffield – noon, rally at Barker’s Pool, City Hall, S1HA. Followed by march through the city centre.

Southend – 11am, rally in the Plaza outside the Odeon Cinema, The Broadway, SS1 1TJ.

Southampton – 12.30pm, march from Hoglands Park, SO14 1HU, to Guildhall Square, SO14 7FP, for rally at 1pm.

Stoke-on-Trent – noon, rally at Kingsway Car Park opposite the Town Hall, ST4 1JH.

Swansea – noon, assemble at Guild hall, SA1 4PE, for march to rally at Castle Square, SA1 1DW. In case of bad weather rally will occur at the Unitarian Church, 238 High Street, SA1 1 NZ.

Swindon - 10am, assemble along Commercial Road, SN1 5NX, for a march to a rally at the MECA Theatre, Regent Circus, SN1 1PR, at 11am.

Telford – noon, rally at Cordingley Hall, Wellington Road, TF2 8JS.

Torquay – 10am, assemble at Town Hall, TQ1 3DR. 11am, march to Princess Theatre, Torbay Road, TQ2 5EZ, for rally at 12.30pm.

Trowbridge - 11.30am, rally at Wiltshire County Hall, Bythesea Road, BA14 8LE.

Truro - 11am, rally in the Hall for Cornwall, Black Quay, TR1 2LL. Noon, march to Victoria Gardens, Hendra Park, TR1 1EA.

Uxbridge – noon, assemble opposite Barclays bank, High Street, UB8 1EB for march through the town.

Warrington – 11.30am, assemble at GMB Office, Town Hill, WA1 2NG. Noon, march to Warrington Town Hall, Sankey Street Entrance. 12.30, rally at Town Hall, WA1 1UH.

Waveney - 7.30pm, benefit gig - ‘Bands Against Bankers’ - at Lowestoft Town Football Club, Love Road, NR32 2PA.

Whitehaven – noon, rally at Castle Park, FLatt Walks, CA28 7RW.

Winchester - noon, assemble at Orams Abour, Clifton Road, SO22 5BU.

Wigan – noon, march from Whelley Labour Club, Northumberland Street, Whelley, WN1 3PZ. 1pm, rally at Market Place, WN1 1NR.

Wirral - 10.30am, assemble Birkenhead Park Gales, CH41 3JU for march and rally.

Wolverhampton – 11am, assemble at Civic Centre, North Street, WV1 1RQ, for march.

Worcester – noon, rally in St Andrews Methodist Hall, Pump Street, WR1 2QT.

Worthing – 10am, rally at St Pauls, Chapel Road, BN11 1EE, followed by a march at noon.

Wrexham – noon, assemble in Queens Square, LL13 8AZ, for march around town centre. Rally at Grove Park Little Theatre, Hill Street, LL11 1SN.

York – noon, assemble at Tower Gardens, opposite Clifford’s Tower, YO1 9SA, for march to York Minster. 1pm, rally York Minster, YO1 7HH.

RMT members back 30 November

The RMT transport union has announced that two groups of members who have public sector pensions have voted for industrial action to protest against changes.

In a ballot of workers in the Royal Fleet Auxilliary (RFA) around 60% voted to strike.

The Royal Fleet Auxiliary services the Royal Naval fleet around the world and the sailors are in the civil service pension scheme.

Tyne and Wear Metro workers - who are in the local government pension scheme - voted 80% for strike action.

Members of 27 unions – including PCS - have now voted to support action over pensions and will take part on a national walkout on Wednesday 30 November.

Read the RMT's latest media release

See all the unions backing the action with ballot details and links to their websites

Everything you need to know about 30 November

It’s time to take sides – join PCS

There is an alternative – economic arguments against the cuts

Ask MPs to defend all pensions

PCS wants politicians to be bombarded with letters demanding decent pensions for private and public sector workers – and an increase to the state pension which is £70 a week below the government’s own poverty line.

Find our model letter and send it for free

Read our booklet – ‘Fair pensions for all’ (PDF)

Twenty-eight unions are backing the day of action over private sector pensions on 30 November.

Write to your MP

Everything you need to know about 30 November

It’s time to take sides – join PCS

There is an alternative – economic arguments against the cuts

Follow PCS on Facebook and Twitter

Get The Workers' song to number one

New pensions research undermines government's 'fairness' myth

While the percentage of private sector workers in similar 'defined benefit' pension schemes to public servants has plummeted in recent years, the average payouts are almost the same as those in the public sector.

In 1997, 34% of private sector employees were in a defined benefit pension scheme - where pensions are linked to earnings; last year that figure was just 11%. For these, the average pension is £5,860 a year, while the average public sector pension is £5,600.

Over the same period, the proportion of private sector workers in any occupational scheme has fallen from 46% to 34%.

The figures are included in new research published today by unions that also shows that changing pension indexation from RPI to CPI in the private sector is estimated to save employers £100 billion over the lifetime of existing schemes. This would be a direct transfer of wealth from employees to shareholders, the unions say.

The new pamphlet, Fair Pensions for All, has been produced by PCS with the National Pensioners Convention, National Union of Teachers, University and College Union, and Unite. Already almost 200,000 copies have been distributed or are on order.

Facts about pensions

• It is only four years since public sector pensions were significantly renegotiated with the previous government in a deal that the National Audit Office reported in December 2010 was "on course to deliver savings and stabilise pension costs", and will save £67 billion for taxpayers.
• Corporate profits have expanded from 13% of gross domestic product in the mid-1970s to 21% today. In the 1990s, corporate Britain saved itself £18 billion through pension holidays, while employees continued to contribute. Private sector pension schemes received £37.6 billion in tax reliefs in 2007/08 - that same year they paid out pensions worth only £35 billion.
• UK pensioner poverty is among the worst in Europe, with France spending over twice as much on pensions and Germany two-thirds more. In the last 30 years, our state pension has gone from being worth 25% of average male earnings to just 15%, now standing at £102 a week, only 57% of the government's official weekly pensioner poverty level of £178. Meanwhile, the cost to taxpayers of means-tested pensioner benefits is estimated to be £13 billion a year.

These facts completely undermine the government's claim that cuts to public sector pensions are about 'fairness'. While it's true we all contribute towards public sector pensions, taxpayers are also subsidising private sector pensions twice: through tax relief; and in the over-reliance on means-tested benefits in retirement.

PCS general secretary Mark Serwotka said: "This research blows a hole right through the government's claim that its cuts are about fairness. Ministers used to talk about affordability, but we proved that wrong - now we've proved they're wrong about what is fair. While ministers want to cut the pay and pensions of public servants, fewer and fewer companies are being fair to their staff. The truth is, we are the ones who are standing up for fair pensions for all."

Why the government's pensions offer is bad news for all PCS members

In this PCS guide to separating the fact from the fiction in the government's pensions offer on 2 November 2011, we test direct quotes from Treasury secretary Danny Alexander's statement in the House of Commons against the reality. 

 

See also our new pamphlet – Fair Pensions for All – jointly published with Unite, NUT, UCU and the National Pensioners Convention.

  Fair pensions for all pamphlet

Government claim:

“The lowest paid and people 10 years from retirement will be protected, and public service pensions will still be among the very best available.”

Reality:

The lowest paid will not be protected – they will still be forced to work longer (up to 68) and suffer the indexation changes which will devalue their pension. The government has said that workers earning less than £15,000 (FTE) will not pay any extra contributions – this protection only covers 4% of PCS members.

Those within 10 years of retirement still face paying higher contributions equivalent to nearly a day’s pay every month (an extra £63.36 a month for the average member), and will lose over £16,000 in retirement as their pension will be uprated by the lower CPI measure of inflation rather than RPI.

Government claim: 

 
“I have listened to the argument that those closest to retirement should not have to face any change at all. That is the approach that has been taken over the years in relation to increases to the state pension age, and I think it is fair to apply that here too.”

Reality:

This is the government’s main selling point of the new offer – and it is not true. Those within 10 years of retirement (i.e. 50-plus in Classic or Premium or 55-plus in nuvos) will still face extra pensions contributions of 3.2% (£63.36 a month for the average member) between now and retirement.

In addition, their pension will still be downgraded in value due to the indexation change from RPI to CPI. This alone would cost the average PCS member £16,400 over a 20 year retirement.

While this is only a partial concession for older workers, it is of no benefit at all to the majority of civil servants who are under 50 (or 55 in nuvos). PCS continues to seek a negotiated settlement in the interests of our whole membership, and future generations.

Government claim: 

 
“Our objective is to put in place new schemes that are affordable and fair for taxpayers and public service workers, and that can be sustained for decades to come.”

Reality:

Public sector pensions already are affordable, due to the reforms we agreed in 2007. The Hutton report shows the costs of public sector pensions falling. The National Audit Office assessed our pensions schemes in December 2010 and found the 2007 deal “reduces costs to taxpayers by 14 per cent”.

The Public Accounts Committee found in May 2011, “the Treasury has not set out clearly what level of spending it considers sustainable in the long term. Instead, officials appeared to define affordability on the basis of public perception” – which is why they are keen to present a false impression to the public about our pensions.

Again the government is trying to create a false divide between public sector workers and taxpayers. Public sector workers are taxpayers too. If pensions are slashed then the cost will still be borne by taxpayers, through increased claims for means-tested benefits in retirement.

Government claim: 

 “Everything that public servants have earned until the point of change, they will keep, and those things will be paid out in the terms expected ... No public sector worker needs to have anything to fear for the entitlements that they have already built up.”

Reality:

This is not true; by imposing the change in indexation from RPI to CPI, the average PCS member would lose £16,400 over a 20 year retirement.

Alongside other unions and the Civil Service Pensioners Alliance, we have taken the government to the High Court to argue that this change was not only unfair but illegal. We are determined to protect your pension by legal means as well as industrial and through negotiation.

Government claim: 

 
“the taxpayer needs to be properly protected from the risks associated with further increases in life expectancy, by linking the scheme normal pension age to state pension age.”

Reality:

We agreed a deal with the last Labour government that took precisely these changes into account. It meant a new pension age of 65 for new starters across the public sector. Based on the changes in the 2007 deal the projected cost of public sector pensions is falling, despite growing life expectancy.

Funding better pensions is a political choice. The UK state pension is worse than in every comparable EU country. France currently spends 12% of its GDP on pensions and Germany over 10%, but the UK only spends 6%.

 

Government claim:

“Pensions would remain considerably better than those available in the private sector.”

Reality:

This is classic divide and rule – and is a complete diversion from the issue at hand. We do not want an equality of misery whereby public sector pensions are driven down to the patchy and poor level in the private sector.

One-quarter of all tax relief on pensions, amounting to more than £10bn annually, goes to the richest 1% in the country. We hear about gold-plated public sector pensions, yet the real gilded pensions are to be found in the boardrooms of private companies that have abandoned provision for their workforces.

Government claim: 
 
“reform is essential because the costs of public service pensions have risen dramatically over the last few decades”

Reality:

This is very misleading. It is true that public sector pensions cost, as Alexander said “just under 1% of GDP in 1970, they account for around 2% of GDP today”.

However, due to the changes agreed in 2007, the Hutton report shows that public sector pension costs will fall from 1.9% today down to 1.4%. The Public Accounts Committee has said that the changes will mean: “costs stabilising at around 1% of Gross Domestic Product (GDP)”.

The government’s latest document, published on 2 November 2011, shows that pension costs will reduce under the 2007 deal to the level they were in the mid-1980s.

These proposed new reforms are a tax on public sector workers to pay for the banking crisis and this government’s failure to generate economic growth.