First and only pension offer

First and only pension offer sees new movement from government

Prospect has agreed to enter a further round of talks on the government's plans to change the civil service pension scheme.

But while it has suspended industrial action for the duration of the talks, it has reserved the right to take further action if the talks break down.

At yesterday’s meeting of the Civil Service Sector Executive, members had a full discussion on the details of a letter dated 15 December confirming the government’s proposals for change. The executive gave guarded approval for the continuation of negotiations based on the framework set out in these proposals.

The government’s amended proposals were set out in a letter to all civil service unions from the Cabinet Office and in further correspondence received during the meeting. Similar letters were sent to other public sector unions.

Although the Cabinet Office sought to make continued participation in the negotiations conditional on acceptance of what it termed “the main elements of scheme design”, Prospect has undertaken to convey the outcome of the talks to the CSS executive and stressed that any final decision will be put to members in a ballot.

Dai Hudd, deputy general secretary, said: “The purpose of the day of action was to get the government back to the negotiating table. We have now seen some movement from ministers and the first offer since the beginning of the campaign.

“None of this makes its proposals more appetising but there has been progress in several areas and we must build on that in the new year.”

Issues on which there has been no change in the government’s stance include:

  • the CPI link for uprating pensions
  • tying the civil service pension age to the state pension age
  • phasing in average member contributions of 5.6% from next April.

Issues on which the government has moved include:

  • improving the accrual rate in the proposed new scheme from sixtieths to 43rds
  • introducing a floor, as well as a cap, below which the employer’s contributions will not drop (2% above or below the current rate)
  • allowing further negotiations on the timing and tiered structure for phasing in the new contribution rates
  • extending and improving the Fair Deal pension protection for civil servants TUPE-transferred out of the public sector.

The net effect of the changes is to move the proposed new scheme closer to the Nuvos scheme introduced in 2007 for new recruits to the civil service, said Dai Hudd.

About 18% of civil servants are already in Nuvos and around 33-34% of staff would benefit from the 10-year protection the government conceded in November.

“Pension contribution rates for 2012-14 and the impact on pay will be key for our members,” said Hudd, “together with the 1% limit the chancellor has announced for another two years.

“The sector executive’s decision means that Prospect stays at the negotiating table and continues the fight to modify the government’s package.

“To have walked away at this point would have been an act of folly. Members must be able to see what the final package looks like and then take the decision on whether it is acceptable or not.”