I was concerned that a document purporting to compare pension benefits in the proposed future (LGPS 2014) pension scheme with those currently on offer (LGPS 2008) included unrealistic assumptions about future earnings growth which tended to make the future proposed "career average" scheme look like a better deal than it is.
The document in question was subsequently withdrawn, but not before four branches had submitted Emergency Motions to UNISON's Local Government Conference.
The key question is about the assumptions you make about the long term future relationship between earnings and prices, because this assumption alters the balance of any assessment of the future value of a career average pension compared to a final salary pension.
In a nutshell, the more optimistic one is about future earnings growth, the worse the LGPS 2014 proposals look when compared to what we have now. Last year - when we were trying to persuade members to strike - our online pensions calculator (which made tailored individual calculations) was based on the assumption that, over the long term, earnings growth would outstrip the Consumer Price Index (CPI) annually by 2.5%.
The "examples" document which I criticised here on 31 May presented figures based upon three scenarios for the long term average relationship between earnings growth and CPI (+1.5%, zero and -1.5%). Of these scenario, over the long term, only +1.5% has credibility. No reputable economic forecaster thinks that, over the long term, earnings will continue to fall behind prices in the UK.
Crucially, however, it is dishonest of us to offer calculations based upon one set of assumptions when we try to persuade our members to strike, and then to use a different set of assumptions when we try to persuade them to settle. Leadership, Dave Prentis reminded us at National Delegate Conference, is about honesty.
Our Local Government Conference agreed, when it passed Emergency Composite 3, which read as follows;
"Conference notes that proposals for the Local Government Pension Scheme (LGPS) were released on 31 May 2012.
Conference further notes that the factsheet "LGPS 2014 - Examples", published on UNISON's website on 31 May uses different assumptions for price and earnings growth than those used in the UNISON pensions calculator publicised in protect our pensions newsletters and used in the run up to our ballot for industrial action on pensions.
Conference believes that, in the interests of consistency and transparency we should use the same assumptions in published examples illustrating the LGPS 2014 as we used in the pensions calculator.
Conference therefore resolves to instruct the Service Group Executive to ensure that the examples published to date are reissued to reflect the same assumptions as those which underpinned our pensions calculator, and that these are issued to all branches, pensions contacts and with the ballot paper."
This is a clear direction, from our Conference, to our elected leaders, to be honest (to "use the same assumptions in published examples illustrating the LGPS 2014 as we used in the pensions calculator"). Unfortunately, the revised version of the examples document now reissued on our website (http://www.unison.org.uk/acrobat/LGPS2014ExamplesNew.pdf) completely ignores this Conference decision in favour of honesty in that it repeats the same assumptions as the earlier, discredited document.
This is a great shame, indicating as it does a lack of respect for our Conference (and a breach of our Rules) - not least because, whilst under pressure at Conference, the officials were able to issue more reliable information (http://www.unison.org.uk/acrobat/PensionsTreasury40yearsRevalued.xlsx) which compared the current and proposed LGPS for future service, based upon the assumptions made by the Government Actuaries Department (GAD) when they carried out their independent costing of the scheme.
There is no excuse for officials to have reissued this discredited document in breach of our policy and our Rules.
The reissuing of the flawed and discredited "examples" document is, regrettably, not the only example of official misinformation.
The main national leaflet about LGPS is factually incorrect when it says that the scheme revaluation rate was "laid down by the Coalition" before negotiations began. This is simply untrue and creates the wrong impression that, instead of negotiating a pragmatic trade off between accrual and revaluation rates (as they did) our negotiators were presented with a revaluation rate as a fait accompli and then secured an improved accrual rate. This may simply be a proofreading error - but it is a material inaccuracy which hasn't been corrected.
Furthermore, the position on survivors' benefits is presented as unchanged between LGPS 2008 and LGPS 2014 whereas in fact the proposals will represent a significant worsening of survivor benefits earned by future service. Again, this may simply be sloppy presentation of the detrimental impact of an unchanged accrual rate as the basis of the scheme changes, but the presentation is materially incorrect.
It's funny how every error and inaccuracy tends to make LGPS 2014 look better than it is.
Actually, it isn't funny at all.
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