UNISON Scotland
New Scottish LGPS
Consultation Paper
The story so far
UNISON Scotland
Consultation Paper released July 2007
Developed by Scottish Local
Government Pensions Advisory Group
(SLOGPAG)
Scottish Government
COSLA
Trades Union
Closing date 31st October 2007
Key issues – broad agreement
UNISON Scotland
Subject to final cost package
•Case for reform
•Final salary scheme
•Accrual rate – 60ths instead of 80ths plus 3/80ths lump sum
•Death in service grant increased to 3 years
•Partners pensions including cohabitees
•Flexible retirement
•Equality impact
Key issues – Ill health
UNISON Scotland
•
•
Current provision – permanent incapacity in job or comparable
New provisions – broad agreement
1. No reasonable prospect of gainful employment by 65
2. Unlikely do gainful employment in reasonable period (3-5yrs)
• TU side 3rd tier – gainful employment shorter period. Payment
equal to accrued pension until secure employment.
• Pension protection extended to ill health.
Key issues - Contributions
UNISON Scotland
•Working assumption - average 6.3%
•Tiered contribution rates like tax mechanism (E&W banded)
•Preferred number of tiers to be agreed.
•Illustrative examples in consultation – 3, 5, 7 tiers
•Employer contributions meet the balance
Key issues – cost sharing & governance
UNISON Scotland
Employers want 2:1 ratio, employer to employee contributions
e.g. total cost 18.9% payroll – employee pay 6.3%
 Excludes investment risk and past deficits
 Probably reasonable as approximate guide
Mechanism for review – trigger if costs shift significantly
Governance proposals
 Cost sharing means members entitled to a greater say
 Options from 50% trustees to improved consultation
Key Issues – Transition arrangements
UNISON Scotland
•Benefits better in new scheme.
•Options for transition
 Simplest - all service is transferred and new benefits apply
•Year for year would incur significant cost
•Transfer value would reduce years of pensionable service
 Alternative – two calculations, pre and post 2009
 Neither impact on ability commute into lump sum
Next Steps
UNISON Scotland
July – Oct 2007 Consultation Exercise
31 Oct 2007
Deadline for responses to this consultation
Nov 2007
Consideration of comments received from consultation
exercise and decisions to be made on new scheme outline
Dec 2007- Feb
2008
Consultation on draft regulations for the new scheme
April 2008
Regulations to be laid in the Scottish Parliament
April 2009
Regulations governing the new scheme takes full effect
UNISON members ballot when final package
agreed. Probably early in 2008.