Thursday, June 28, 2012

An untruth to sell a dodgy deal on pensions?

Our General Secretary, Dave Prentis, in a thoughtful section of his annual Conference speech last week said that leadership was, in part, about "honesty."

No one could disagree.

Unfortunately the standard set by our General Secretary is not met, in an important way, in the key national UNISON leaflet explaining the proposals which have been negotiated in relation to the Local Government Pension Scheme (LGPS 2014) - which is still online, some time after the blatant error was pointed out, at http://www.unison.org.uk/acrobat/20840.pdf.

The untruthful content is as follows;
 
"Inflation link for revaluation
 
-CPI revaluation rate - as laid down by the coalition before the current negotiations"
 
(CPI = Consumer Price Index)

This is completely wrong. The Treasury document published on 2 November (http://cdn.hm-treasury.gov.uk/pensions_publicservice_021111.pdf) proposed "an accrual rate of 1/60ths and earnings indexation for benefits while still working in the public service". This was the "reference scheme" and it did not include a revaluation rate of CPI but of Average Weekly Earnings (AWE) (estimated by GAD - the Government Actuaries Department - to be CPI+2.25%).
 
At no point did the Coalition Government "lay down" what the revaluation rate in LGPS 2014 should be - indeed (as honestly reported to UNISON activists in our Region at a briefing before Conference) the negotiators in each of the scheme-specific negotiations had leeway to vary the revaluation rate at the expense of the accrual rate (and vice versa) within an overall "cost envelope".

This error isn't trivial. Taken together with the preceding paragraph in the leaflet (which says that 1/49 accrual rate in LGPS 2014 is better than 1/60 in LGPS 2008 - and, since it fails to compare like with like is merely disingenuous rather than entirely dishonest) it creates the impression that our negotiators were given the revaluation rate as a fait accompli and then managed to improve the accrual rate.

The truth of course is that the unfavourable revaluation rate was a trade off for a more favourable accrual rate and that the whole thing fits into the cost envelope of the "reference scheme" of 2 November which was 1/60 accrual with revaluation based on earnings growth, not prices. (The change for the LGPS post 30 November was the avoidance of contribution increases).

Once again (http://www.jonrogers1963.blogspot.co.uk/2012/05/lies-damned-lies-and-examples.html?m=1), national officers of the Union representing the great majority of unionised members of the LGPS are publishing, in our name and spending our subscriptions, misleading information which seeks to "sell" us the LGPS 2014 deal.

I can't and don't say that this is deliberate mendacity. It may be that the author(s) and proofreader(s) did not understand the process they were describing, or that they confused the completely different question of the uprating of pensions in payment (where the Government have prescribed CPI) with the question of revaluation of previously accrued pension prior to retirement in a career average scheme (where they have not). The upshot though is that we are distributing information to our members which is incorrect. This cannot stand.

I didn't rush to blog this criticism but raised the matter appropriately within the Union. Unfortunately this has yet to achieve anything. I would have left it more than one day before blogging were we not saddled with a very tight timetable (never given the explicit approval of our Local Government Conference).

UNISON must revise this leaflet now and issue both a correction and an apology to members who have been misled.

Someone should also answer the question; "If this is such a wonderful pension deal, why does it take such effort to ensure that the information which we issue about it is reliable?"

I'm not happy.

Sent using BlackBerry® from Orange

No comments: