Pensions Robbery

Our Pensions

Cost of living crisis exacerbated by government withholding overpayment of pension contributions.

Background

Last month we reported on the budget announcement and how the pay freeze was affecting members in the Home Office. Our members are feeling the pinch more than ever as the cost-of-living crisis deepens. Despite being the government’s own workers, and working all the way through the pandemic, many members are struggling financially. Members are facing:

• Rising inflation

• Paying 2% more a month for their civil service pension

• Cuts to Universal Credit which many claim

• An increase in National Insurance contributions

• 11 years of pay caps and freezes.

Many of us are already suffering due to the pay freeze imposed by the government for 2021. With inflation this high, they are getting worse off by the month. In his recent budget the Chancellor failed to give any indication of what money would be given to the civil service to fund a decent pay rise for 2022.

On top of this any member covered by the Civil Service Pension Scheme is already overpaying into their pension by 2% every month. On average salaries this works out at around £500 a year and this has been ongoing since 2019.

Pensions

The government is still withholding money that is owed to civil service pension scheme members. A cut in employee contributions, that’s now worth more than £1,000 for many, should have brought in nearly 3 years ago. With every passing day members are losing badly needed cash. Meanwhile the government wants to rip up the rules so it would never be obliged to pass benefits on to scheme members in this way again – known as ‘cost-sharing’ provisions.

It is also being slow on the application of the remedy process brought about by the McCloud judgement on age discrimination, which could be detrimental to some of our members. These pensions are not ‘gold-plated’ as some suggest – they have been paid for.

PCS has begun legal action to challenge the government blocking its own cost sharing provisions. These were added when the reformed schemes were introduced in 2015 and intended to apply for 25 years. They have effectively been ripped up at the whim of the Treasury. The list of unions making a challenge includes FBU, PCS, POA, GMB and Unite. Our view is that scheme members should not bear the cost of fixing the fault found by the Court of Appeal which ruled against the unlawful age discrimination in the government’s transitional arrangements.

Four-yearly valuations were put in place to inform any need to vary the relative costs for employers and scheme members. In 2019 the valuation was 5.4% below the target cost and the Civil Service Scheme Board recommended a reduction of 2% in the rates of employee contribution and some improved benefits. It was blocked by then-chief secretary to the Treasury Liz Truss using the pretext of the court case known as the McCloud judgement which found against the government. This has meant that the employee contribution rates have remained unchanged in 2019, 2020 and 2021 – see how much this has cost you by using our calculator and share your loss on social media using the share buttons on the calculator page.

This is money that you should have in your pocket, that you have been overpaying into the pension scheme. Use our campaign action to email your MP telling them how much you have lost. The email has all the details in there – you just need to add in your own loss details. We are asking MPs – via your personal emails – to write to Lord Agnew, the minister in the Cabinet Office and Treasury who is responsible for your pension.

Pension Seminars

Later in the month we are also holding detailed pension seminars online to fully explain our pensions campaign.

Sign up online for the seminar at 12.30pm on Tuesday, 30 November and for the seminar at 6pm on Thursday, 2 December.

[Apologies for the lateness of this notification - the branch only received this members' briefing for distribution today, 29 November.]

Conclusion

It’s painfully clear that a great many of our members are facing an especially difficult few months this winter. Far too many are already struggling to make ends meet. That’s why getting involved in your local PCS activities is so important.

Meaningless rhetoric from the Chancellor on lifting the public sector pay freeze from April, without providing extra money to fund proper pay rises, does not wash with PCS members in the civil service and related areas.

The PCS national campaign encompasses all the issues that affect the money in your pocket, wherever you work and whatever your circumstances. The more members who get involved in it, the more impact we can have.

We are urging everyone to take part in building on our strength as a union by recruiting non-members, becoming active and encouraging others to do so – for example, by becoming a PCS Advocate. It’s a role that allows you to do as little or as much as you have time for, and it helps amplify PCS’s presence in your workplace, one voice at a time. If you are interested in becoming more involved, please talk to your local rep or branch or reply directly to the authors of this briefing.

If you haven’t already done so, let PCS have your personal/non-work email address and your mobile phone number. We’ll only use it to keep you informed about PCS matters. You can update your details securely online by registering for PCS Digital.

James Cox (Group President), Pete Wright (Group Vice President), Mike Jones (Group Secretary)