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Final pension offer from government

Final offer for new pension scheme to go to ballot of members

Prospect and other civil service unions were today presented with a final government offer on changes to the pension scheme for approximately 560,000 staff in departments and non-departmental public bodies.



The 13-page offer follows weeks of intensive negotiations with the Cabinet Office and the Treasury on a new scheme to take effect in April 2015.

Dai Hudd, deputy general secretary, said the final offer had made “significant progress” on the Heads of Agreement proposals tabled by the government in December. But he stressed:

“This offer only covers the new pension scheme to be introduced in 2015 and not the higher pension contributions being imposed from this year, which we continue to protest direct to the Treasury and ministers.”

The new scheme is modelled on the Nuvos scheme introduced in 2007 for new entrants to the service, which already covers 20% of civil servants. For details, see the circular issued today http://library.prospect.org.uk/id/2012/00381 to sector reps and the offer document itself. http://library.prospect.org.uk/id/2012/00388

Compared to the government’s original proposals for change, the new scheme includes:

  • a faster accrual rate of 2.32%
  • a cap and a floor on the employer’s contributions, to protect the long-term interests of taxpayers and staff
  • additional flexibilities to give individuals more choice over their pension provision and date of retirement
  • protection for the pensions of staff who are privatised or outsourced to the private sector.

However, unions were unable to improve on the amount of contribution increases being imposed on employees, which will average 5.6%; or the intention to align normal pension age with state pension age. A ruling on the unions’ appeal against the CPI indexation switch is awaited any day from the Court of Appeal.

The government’s proposals will now be considered by branch representatives from the union’s Civil Service Sector at a briefing conference in London next Friday 16 March. They will then be put to a ballot of all 34,000 members affected.

Dai Hudd said: “This is a complex offer and members will need time to understand how it affects their own personal position. The crude and unfair manner in which ministers have tried to impose their will on staff has provoked huge concerns which could all too easily prompt many to opt out of the scheme or exit the service altogether.

“That is why we will continue to campaign against the imposition of higher contributions in April, on top of a third year of pay curbs and the unrelenting pace of job cuts.”

Prospect and the FDA yesterday wrote to the Treasury and the Cabinet Office restating their opposition to the contribution increases. Prospect’s Civil Service Sector Executive is also examining whether to bring the contribution hike issue together with a campaign against the 1% pay limit.

In preparation for a campaign, Prospect has commissioned independent pay research to demonstrate the extent to which pay rates for civil service specialists are out of line with both the wider public sector and the private sector. The findings will be out in time for the meeting of Prospect reps next week.

Further material will be prepared to explain the pension proposals to members, including a spreadsheet and examples so individuals can relate the impact of the changes to their own position.

Questions about the proposals should be sent to pensionsreview@prospect.org.uk