Commonwealth War Graves Commission: Pension Fund — House of Commons, 2016-02-29
Topic: Labor
Christopher Charles Stephens (Scottish National Party, Centre-left): I thank the hon. Gentleman for that intervention. He has spoken to me about that privately and I have asked questions about it. His comments are surprising because of the aggregate accrual rates in the Alpha scheme. One of the problems is that there has been no discussion of the actuarial variations between the trade unions and those representing the commission in the talks. I hope the hon. Gentleman will use his good offices to put that right The commission’s response was to assert that CWGC staff are not civil servants, making them ineligible to join the Alpha scheme. However, the Office for National Statistics details the CWGC as part of the MOD accounts, and Her Majesty’s Revenue and Customs also lists CWGC staff as civil servants. In fact, the CWGC tends to pick and choose when the civil service hat fits. For example, the 1% pay cap in the public sector is often cited in pay talks as a reason to keep down pay rises The trade unions believe that they were never given a satisfactory reason why the CWGC did not apply for admittance as a scheduled body under the Government’s new fair deal policy. Instead of putting forward a case for staff to join Alpha, the commission seemed to decide in advance that they were ineligible to join and then sought confirmation of this from the MOD. The commission’s unwillingness to engage and seek alternatives that would mitigate the financial impact on staff was demonstrated throughout the consultation Trade unions repeatedly asked for more information to inform the consultation and aid the consideration of alternatives. However, the commission declined to offer that information, and the trade unions had to conduct much of the consultation without key information. For example, they requested an anonymised breakdown of how the new scheme would financially affect each member of staff, crucial information that would allow unions to see the impact of the proposals and help them put forward alternatives. That request was declined, leaving the unions no option but to ask members to send in their individual statements and to piece them together to form an overall picture Staff representatives were denied access to key decision making meetings at which they had requested the opportunity to put forward the case to keep the scheme open. The unions wrote to the commission asking to attend the meeting on 9 December 2015 when the commission put forward its case for closing the scheme to the board of commissioners. The commission wrote back to say that the unions’ attendance would be "inappropriate" Despite the trade unions raising numerous concerns and offering reasonable alternatives, the decision to close the final salary scheme appears to have been a fait accompli. The commission made the final decision in December 2015 to go ahead and close the scheme in April 2016. As staff have mentioned, the pension scheme has always been a way of attracting and retaining staff in the commission, and it has featured strongly as part of the overall benefits package that staff have signed up to when joining. To take it away after years of service, when staff are so painfully near retirement, is just unfair. Long-serving staff have put up with great disturbance and sacrifice to their family lives, such as moving to foreign countries. Spouses and partners have often been unable to have careers as a result, and the pension that commission staff accrue should recognise that Approximately 60% of those affected by the changes are 50 years old or more, so they could be retiring within the next 10 years. Staff within a few years of retirement now have little time to re-adjust their financial planning for retirement, as the alternative Group Pension Plan will not deliver anything like the benefits of the final salary scheme. When changes were made to the civil service pension schemes, protection was given to staff nearing retirement, in recognition of the fact that they would have made financial plans based on the assumption of their existing pension entitlement. That protection has not been offered to staff at the commission Closure of the scheme from 1 April 2016 will have a significant detrimental effect on the future pensions of UK-based staff and will cause considerable unrest among employees at a time when they are working hard to further enhance the reputation of the commission with the work on the 1914 to 1918 centenary commemorations. The changes also come at the exact time when workers currently contracted out of the state second pension, as staff in the commission are, will see national insurance contribution increases of 1.4%. From April 2016, staff transferring to the GPP scheme will therefore have the dual disadvantage of paying national insurance increases and pension contribution increases of up to 5% for the new scheme. Closing the final salary pension scheme will create financial difficulty for the commission’s longest-serving, loyal staff, who have sacrificed much for the commission over the years The trade unions believe that they have adopted a constructive approach to finding alternatives. However, the commission has refused to make any meaningful changes to its initial position to mitigate the financial impact on staff.