The civil service’s largest union has called for a pan-Whitehall campaign against the government’s controversial decision to pause part of the valuation of pension schemes that had been expected to result in both reduced contributions for staff and increased benefits.
Last month Chief Secretary to the Treasury Liz Truss announced the halt in response to a Court of Appeal decision related to the pension contributions of some firefighters that she claimed could have knock-on effects on the value of schemes including the Civil Service Pension Scheme.
The PCS union said the revaluation had been expected to reduce Civil Service Pension Scheme members’ contributions by around 2% at the same time as as improving death-in-service benefits and increasing accrual rates for “alpha” scheme members.
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The changes to public service pension schemes introduced in 2015 include a cost-cap mechanism that requires remedial action on contributions if employer costs change by more than 2% above or below the cap – which is currently 18.5% for civil service schemes.
The valuation exercise is supposed to take place every four years and tentative figures indicated that civil service schemes came in at more than 5% below the cost cap.
However in her statement to parliament last month, Truss said the implications of the Court of Appeal decision could have a £4bn-a-year impact on the cost of public sector pensions, meaning it was “not now possible to assess the value of the current public service pension arrangements with any clarity”.
Truss’ valuation pause was aimed at delaying the exercise until the outcome of the government’s attempts to appeal in the firefighters case – which centred on age-discrimination – was known.
PCS general secretary Mark Serwotka said union members should not have to bear the brunt of “government decisions” to flout equality laws.
“The government is stalling and this is why we need a strong united public sector union campaign to put pressure on ministers to implement the valuation remedies now, including reduction of our members` contributions,” he said.
Civil Service World understands Whitehall unions want the Treasury and the Cabinet Office to agree to the immediate introduction of a 2% reduction in Civil Service Pension Scheme contributions along with the revised accrual rates and death-in-service benefits if the government is successful in challenging the firefighters decision. And that they want the move should be backdated to take effect from April this year.
Union sources questioned the workings for Truss’ £4bn figure and the way it could impact the civil service schemes – as opposed to those in the wider public sector. But they expressed fears that ministers would look to reopen the 2015 pensions changes if the Court of Appeal’s firefighers decision was not resolved to their satisfaction.
PCS said it would be working with other public sector unions via the TUC to campaign against the valuation pause.