Surrey County UNISON branch

Following the Parliamentary statement by Phil Woolas on 23 November, further negotiations have taken place between the trade unions, the Local Government Association and the Local Government Employers. On 22 December, the draft Regulations were released.

You will find a letter (on page 4 of PDF) from Phil Woolas, the DCLG Minister, responding to points raised jointly by the Trade Union Side and employers. These include ill health retirement, protection, transfer arrangements for existing staff and proposals for the manual workers’ 5% contribution rate. He also makes the following points:

• Ill health retirement proposals are to be "no less favourable" than in the 1997 Regulations.
• Existing scheme members with protection "will be permitted to maintain these in the new scheme".
• He will consider further proposals from the trade unions for extending protection "within the legal framework".
• In respect of the improvement in final pensionable pay to include the provision of the best three year average in the last ten years of service he recognises there may be practical difficulties in introducing this and awaits "jointly suggested remedies" from the unions and employers.
• The ex-manual worker 5% contribution rate will not be retained.

Detailed summary of proposals

• Improve the accrual rate to 1/60th – with pension uplifted if member draws pension later than 65
• Improve definition of pensionable pay to be the better of earnings in the last year or an average of three consecutive years in the last ten years of membership
• Ability to take up to 25% of the value of the pension as a lump sum
• Improved lump sum death benefit of three times actual salary for death in service
• Retirement with pension before 65 by choice (with reduced benefits) or with employer consent
• Retirement with pension on grounds of redundancy at 55 or over with protection for those aged 50 until 2010
• Allow employer to choose whether or not to pay an immediate pension on redundancy and if so to allow early retirement reduction to be applied
• Improve discretionary powers for employers to increase pensionable service by up to 10 years from the current 6 2/3 years currently allowed
• Introduce discretionary power for employers to increase pensions in payment
• Introduce unmarried partners pensions/co-habitees pensions backdated to 1988
• Ill health retirement enhancements to be ‘no less favourable’ than in the 1997 scheme: − Those "unable to perform local government duties but able immediately to undertake gainful employment" will receive accrued rights only and no enhancement.
• Those "unable to undertake gainful employment on cessation, but likely to be able to do so before normal retirement age" will receive accrued rights plus 25% of prospective service to normal retirement age
• Those "unable to undertake gainful employment before normal retirement age" will receive their accrued rights plus 50% of prospective service to retirement age
• The employee contribution rate will be a variable contribution model based on two bands: 5.5% on the first £12,000 pay and 7.5% on pay above £12000. This is based on an average contribution of 6.3%.
• Widows/widower/Civil Partners and new co-habitees benefits accrue at 1/160 as at present
• Benefits earned up to 31 March 2008 for current scheme members including those with protection for the rule of 85 will be banked, with new benefits earned from 1 April 2008 calculated at 1/60
• All members in service at 1 April 2008 including will transfer into the new scheme
• There is no further proposed protection, although the Minister has said in his letter that he will consider further proposals from the unions

New draft regulations, a covering letter and all responses to consultations so far

These regulations are now subject to consultation. The closing date for comments is 28 February 2007. There will also be a further set of Administration Regulations – yet to appear – which will be subject to consultation in the same period.

What happens now?
The Service Groups will meet next week to consider the draft Regulations, priorities further negotiation and any other agreed steps. The Local Government Standing Orders Committee is meeting on 4 January to outline the timetable for the Local Government Special Conference, which has been given the go-ahead by the NEC.