PCS is calling for a joint campaign of public sector unions over the government’s outrageous decision to suspend the public sector pension valuation process which could have led to reductions in pension contributions.
We have already expressed anger and concern over the government’s announcement to pause part of the valuations process for public service pensions.
Talks with the coalition government on reform of public service pension schemes began in 2011 and ended with an imposed outcome. A major strike by all public sector workers took place on 30 November, 2011 and PCS led an ongoing campaign of opposition to the changes.
An important feature of the new, imposed arrangements was the government`s arrangements for continuing control of pension costs, by requiring scheme valuations every 4 years, and applying a cost cap mechanism.
The cost cap process stipulates that, if the valuation shows an employer cost of more than 2% above or below the employer cost cap figure – currently 18.5% for the civil service schemes – then steps must be taken to rectify the breach and restore the employer cost cap figure to the target amount of 18.5%. The steps to be taken can include changes to members’ contributions and/or changing pension benefits.
In 2018, the first valuation in the 4-year cycle since the imposed pension reforms was completed, and a downward breach of the cost cap of 5.4% was declared.
Had this proceeded members could expect to have gained:
- Reduced contributions of at least 2% later this year.
- Increased accrual rate for Alpha pensions.
- Improved death-in-service benefits for most members.
The government is arguing that, as it believes that there is a potential read-across of this ruling to other pension schemes, “it is not now possible to assess the value of the current public service pension arrangements with any certainty.” This is despite the fact that in early January it seemed that final recommendations would soon be put to the government for proposals to be made and to be followed by consultation with PCS and other unions.
The government has given no indication of when negotiations will restart and importantly no idea of when, or if, members will have any gains arising from this revaluation.
PCS will be working with other public service trade unions, via the TUC, to ensure that our message and that of others is properly heard.