Government will use Hutton report to raid public sector pensions

UNISON chief, Dave Prentis, is warning that the Government will use today’s Hutton report as a Trojan horse to raid the pensions of millions of public sector workers. The union is sending out a message to its 1.4 million members warning that industrial action is now one step closer.

Dave Prentis, said:

“Whatever the Hutton report may say about fairness, the Government will use it as a Trojan horse to raid the pensions of hard working public sector workers. Pensions that our members have paid into year in year out and which are fair and affordable.

In fact, even before the report today, the Government announced they were increasing employee contributions by 50%. “There is a lot of nonsense talked about public sector pensions – they are not gold plated. The average is very low -in local government, the average is just over £4,000, falling to £2,800 for women.

Asking workers to work longer for less is simply not an option. We want to talk to the Government about their response as a matter of urgency. But I am sending out a clear message to our 1.4 million members warning them that industrial action is now one big step closer.”

There is a lot of misinformation about public sector pension schemes. The facts are:

*The local government and NHS pension schemes were renegotiated in 2006 to make them sustainable and affordable.

* Both schemes are cash rich – more is going in than coming out.

* Last year, the NHS scheme received £2 billion more in contributions than it paid out and this money went straight to the Treasury.

* The average pension in public service pension schemes is very low, for example in local government, the average is just over £4,000, falling to £2,800 for women.

* If these people didn’t save for their retirement, they would have to rely on means-tested benefits paid for by the taxpayer.

* Pensioners are already being hit with the move from RPI to CPI to calculate annual inflation increases – this will reduce their value by 15%.

* When the NHS scheme was renegotiated, protection was built in for current members to retain their retirement age of 60. New members have a retirement age of 65. If that agreement is broken, industrial action could follow.

* Government cuts to local government employers grants mean that the shortfall in pension contributions has to be made up by employees. They may have to pay between 50% and 100% more for a reduced pension. This is effectively a tax on low paid workers.

* Studies have shown that if the contributions rise too much, workers will desert the local government scheme and it could collapse.

* The local government scheme invests more than £100billion in the UK economy. If the scheme collapsed, it would have a devastating impact on the economy.

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