Pension Update

Nothing yet cast in stone re rises in pensions.

John Swinney, the Cabinet Secretary for Finance addressed the local JBB last Tuesday (29th Dec), where he basically stated that central government continue to push for the 3.2% general pension contribution increase over the next 3 years. This differs slightly for those in the new 2006 scheme and indeed those in non federated posts.

The drive is still for the 1.25 and 1.25% percentage increases in the next two years with the make up in year 3.

Mr Swinney indicated that he and other ministers, including the First Minister had pushed back against this, feeling this approach flawed. However Westminster maintains that should this not be implemented by Scottish Government then the deficit will be withheld from the block grant. In effect creating a budget shortfall of £8.4 million/month which Mr Swinney stated would result in job cuts.

He was asked quite strongly if he had the resolve to fight this further, and stated that there had been a number of robust exchanges between his team and the Treasury, on this matter, but as they hold the purse strings, Westminster Government seem determined to push through this measure.

It was highlighted that the current wage freeze meant a significant cut in real earnings for all, and that this would ultimately result in financial hardship for many officers. It was stated that there needed to be minimal pension increases during such a pay freeze. Mr Swinney stated he agreed with this, but stated despite his protestations, his hands are in many ways tied by Westminster.

We also asked about having smaller pension increases in the early years which he agreed would make sense…. if this had anything to do with pensions! His view was that the 3.2% was nothing more than a deficit reduction measure being imposed on public sector workers.

At the recent national forum, a pensions expert, who undertakes work obo the Police Federation of England and Wales, and who had previously worked for the Home Office, indicated that during the recent bargaining with the public sector, there was an offer of retention of terms and conditions of pension settlement for staff with 10 years or under to go. He felt that this would be a good starting point for discussion for Police Pensions.

This may afford some relief to officers in this service bracket, (no guarantees) however the situation still remains far from settled. We appreciate this gives no great satisfaction to those of us with longer periods to serve, however there remains a significant amount of bargaining and consultation to go, with much of the public sector wrangling clearly being a starting yardstick for our negotiations. The Federation will of course represent ALL officers in these negotiations.

England and Wales, have many significant concerns hanging over them, not only through the Hutton work (pensions), but also the Windsor reports, 1 and 2.

The good thing is though that the Scottish Government remains opposed to implementing many of the Windsor recommendations, “not now , not ever”.

What happens next will follow the developments in the Public Sector negotiations. Once that deal has been agreed/imposed we will be able to negotiate on how that transfers across to police pensions

Hope this gives you a short insight, in an area that clearly concerns and affects us all. Contributions will go up , the question then is by how much and when.

As always, seek independent financial advice before even considering changing your pension arrangements.

We’ll update you with further information when we get it but feel free to speak to any Federation Rep should you have further questions.