UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Saturday, 16 July 2011

More on the Pensions 'double, double whammy'

The Touchstone blog reports that public sector pension costs were stabilised even before the change in indexation from RPI to CPI:  http://www.touchstoneblog.org.uk/2010/12/nao-say-that-public-sector-pension-costs-were-stabilised-before-cpi-indexing/

Furthermore, a recent Chartered Institute of Public Finance and Accountancy (CIPFA) report which analysed 89 LGPS funds across England and Wales has shown that despite the global financial crisis and the fact that people are living longer, pension fund deficits as at 31 March 2010 show only a small deterioration on the 2007 position: http://www.cipfa.org.uk/press/press_show.cfm?news_id=61468

The imposed change to CPI had the effect of reducing scheme liabilities by around £15 billion going forward to 2013.
These facts show beyond doubt that the measures being taken by the Con Dem's so far as well as those under negotiation are austerity driven to enable Government to pay debt back to bond holders.

A recent blog on the Economist website artcile asserts that union affordability arguments require us to accept indexation change and an extended retirement age for all not just post 2006 entrants to the workforce: http://www.economist.com/blogs/buttonwood/2011/06/pensions-and-economic-growth

He’s partly right of course Hutton did say that the savings in RPI change were big and he uses them in the graph. But he disagreed with the change and the Economist writer misses the Conservative-dominated cross party Public Accounts Commitee (PAC) report which states that the public sector pension scheme reforms introduced in 2007/8 will keep the costs of our pensions stable, generating more than £67bn in savings to the taxpayer over the next five decades: http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/pensions-report/

Our current schemes are affordable for our economy and for us as taxpayers. However even the PAC report will be swept away by the latest change in government accounting which puts for the first time the pay-as-you go liabilities on the books – conveniently they come to £1.2trn the same amount as the banks were bailed out by! http://citywire.co.uk/money/whole-of-government-accounts-the-1-2-trillion-cost-of-everything/a507939