Support staff will quit LA pensions if changes go ahead, Osborne warned

3rd June 2011 at 01:00
Local Government Association says increased contributions put scheme at risk

Thousands of teaching assistants, bursars and school business managers could quit their pension schemes over proposed increases to contributions, the Local Government Association (LGA) has suggested.

In a letter to chancellor George Osborne, the LGA said that planned increases to contributions - which could be almost 50 per cent for some workers - risked creating a "vicious circle of even higher drop-out rates" from the local government pension scheme (LGPS).

Figures released earlier this year suggest that anyone earning more than #163;24,001 a year will face increased contributions. This would include higher level teaching assistants and other senior school administrators.

Jon Richards, senior national officer for education at public sector union Unison, which represents non-teaching staff, said around 5,000 educational psychologists and school improvement officers would also lose out under the proposals.

The warning comes as tens of thousands of teachers are being balloted on strike action over proposed changes to their pensions.

Two-thirds of members of the local government pension scheme earn less than the #163;24,000 threshold, meaning that a greater "burden" of the proposed changes will fall on "middle earners", according to the LGA letter signed by chair Baroness Eaton and Sir Steve Bullock, chair of the Workforce Programme Board.

"A significant level of opt-outs would result in a serious and detrimental impact on the scheme's future sustainability and viability," according to the letter, which was sent earlier this year, but only came to light this week.

Staff earning between #163;24,001 and #163;31,500 a year would see their contributions increase from 6.5 per cent to 9.7 per cent under the Government's proposed changes, which are to be phased in by 201415.

Mr Richards warned that a flood of support staff leaving the LGPS could put the scheme's future at risk. "The LGPS is different from the teachers' pension scheme (TPS) - it's fully funded," he said. "If the TPS runs into trouble, the Treasury will foot the bill. The local government scheme lives and dies by its income.

"You are going to work longer, pay more and get less. If the (financial) pressure people are under means that they leave the scheme, there's no guarantee the local government scheme will be able to continue."

Teachers from the NUT and ATL unions could stage a walk-out on 30 June if their ballots of staff over whether to take action win backing.

The NASUWT is waiting for talks with the Government to conclude before deciding whether to ballot its members.

The union reported that, at the latest meeting held last week, the TUC presented evidence that suggested the proposed changes would lead to "a significant opt-out of pension schemes across all services".

A NASUWT spokesman said: "The TUC asserted that there was still much more information needed from ministers on the underlying assumptions they were making."

The next meeting between union and Government officials is scheduled for Thursday 9 June.

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