Defined Benefit 

Union warns against pension changes for education staff

Union warns against pension changes for education staff

A workers’ union has warned that the government's plans for pension changes in schools and universities would be bad for staff and a danger to the scheme itself.

The government in May proposed to allow further education, sixth form college and higher education corporations to opt out of the Local Government Pension Scheme for new non-teaching staff.

But Unison, which supports 50,000 members working in universities, is calling the proposals from the Ministry of Housing, Communities and Local Government an "unwarranted and grievous attack on the pension rights of our members".

Under the plans universities and colleges in England will have the option to enrol their non-teaching staff in a pension scheme of their choice.

This means the new workers won’t have to be enrolled in the LGPS, a defined benefit pension fund, which has been mandatory previously.

The LGPS is a funded scheme, which means liabilities can potentially fall back on other LGPS employers in the event of an employer becoming insolvent.

This means public bodies could be impacted financially if one of the other organisations fails.

But if the government's proposals are approved, each corporation would be able to decide for themselves whether to offer the LGPS to all or some eligible new employees.

Jon Richards, Unison’s national secretary, said "not providing a decent pension scheme for new staff could lead to a two-tier workforce, with colleagues doing the same job being provided with different pensions provision".

He added: "Those not in the LGPS would likely end up with far inferior pension provision leading to more public service workers retiring into poverty.

"The proposals risk penalising the lowest paid, mainly female, workforce and could lead to potential discrimination and equal pay issues."

Because the proposals only apply to England, Unison is arguing that it would also lead to two-tier pension provision for university and college workers between England and the devolved nations: Wales and Northern Ireland being covered by LGPS; and Scotland which has its own separate Scottish LGPS.

Mr Richards, who is vice chairman of the LGPS advisory board, also warned that the proposals "could damage cash flow for a number of LGPS funds, affecting workers in local government and services far beyond further and higher education".

maria.espadinha@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.