At the beginning of the month a government consultation paper was released with some very worrying implications for Local Government Pension Scheme members.
The government is proposing that there will no longer be a legal requirement for ‘further education corporations, sixth form college corporations and higher education corporations’ to offer LGPS membership to new non-teaching staff. This has been expected for a while, and sadly has come at the request of universities and colleges themselves. The proposal will no doubt be met with jubilation within many university boardrooms.
To be clear; the paper is proposing that universities will be able to decide whether to offer the scheme to new members of staff and is proposing that current employees’ scheme membership will be protected. The proposals are to be consulted on, and the government will need to pass legislation to make them happen.
Under the proposals, universities can make the decision themselves about whether to continue offering LGPS to new staff members, according to their own needs and ‘business model’. In practice this means that universities may decide to offer the scheme only to staff above a certain grade. Similarly, universities in competitive labour markets (e.g. in London or the South-East) may decide to continue offering the scheme to encourage staff retention.
Universities that decide to partially or fully pull out of LGPS are likely to offer their new non-teaching staff a cheaper (and far worse) pension scheme, with lower employer contributions.
The rationale behind the changes is that universities are now marketised and are in competition with each other, so are effectively no longer public sector employers. This rings hollow – when it comes to pay restraint and blocking strike action the government are happy to consider us public sector employees, but when it comes to pensions we no longer are.
The paper reassures us that current LGPS members will be protected, but as our colleagues in post-92 universities have found, pension ‘reforms’ are rarely final. On top of this, blocking new entrants to a pension scheme will damage it in the long-run. For example, in the current Firefighters’ dispute, a drop in contribution income (due to redundancies) is being given as a reason for cutting their pension scheme benefits.
HE and FE staff currently account for around 20% of LGPS members. Withdrawing access to the scheme for new staff in these institutions will be deeply damaging over the long-term, and will affect the benefits of all LGPS members.
Unison will be working locally and nationally to oppose this regressive proposal. We urge all members to respond to the consultation here.