GMB criticises government over pension payments

18 Apr 19

The government has “swindled” public sector workers out of £2.4bn in pension payments, a union has claimed.

The GMB union has written to the prime minister urging the government to “make good” on its promise to refund four million public sector workers after they were “effectively overcharged on their pensions”.

A deal to give workers on local government, civil service and the NHS pension schemes reduced contributions and improved benefits had been agreed by unions and the government following changes to pensions in 2015.

The “cost cap” arrangements, introduced in 2015, meant any shortfall in pension funds would be made up through increased contributions and reduced benefits. In turn, excess funds would be redistributed back to members from 1 April via reduced contributions and improved benefits – which GMB says hasn’t happened.

GMB’s letter said that these benefit improvements have been “snatched away from GMB members unilaterally”, adding that the excess funds are being withheld by the government while it pays for a legal appeal following a defeat on a separate matter on pensions.

The government is currently appealing a decision by the Court of Appeal, which found separate reforms to pension ages to be discriminatory. This has also led to uncertainty for pension fund administrators.

George Georgiou, GMB national pension organiser, said: “It’s absolutely outrageous ministers think they can swindle £2.4bn out of dedicated public sector workers’ pensions.

“These are the people who keep our health service, councils and government running.

“They should be ashamed of themselves and take steps to put it right immediately – these improvements to benefits are needed particularly for low-paid public sector workers.”

GMB – as well as writing a letter the prime minister – said it will petition chief secretary to the Treasury, Liz Truss, to get the pause lifted.

An agreement had been reached for the lowest paid members on the LGPS to have payment contributions cut and improved death benefits.

Civil service workers were offered a real cut in the contribution level paid by members and other structural reforms to modernise the scheme.

NHS members had agreed changes that would benefit part-time workers and aligned contribution rates to tax thresholds.

The Treasury has been contacted for comment.

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