IFS Shoddy Pensions Report
Tuesday 31st January 2012
IFS REPORT ON PUBLIC SECTOR
PENSIONS CHANGES IS A SHODDY PIECES OF WORK AND MISREPRESENTS THE
LOSSES TO WORKERS SAYS GMB
GMB CEC on February 14 is likely to
refer the final proposals to GMB members and negative impact
of the changes may be why they may well say 'no' and instead opt
for further action says union
GMB, the union for public sector workers,
commented on a report from Institute of Fiscal Studies (IFS) on the
savings to taxpayer from changes to public sector pension schemes.
See notes to editors for GMB analysis of main points.
Brian Strutton GMB National Secretary for
Public Services said "The IFS press release and the report
are shoddy pieces of work by IFS.
Of course the taxpayer gains at the
expense of public sector workers – that is why millions went on
strike. The real question is why has the IFS chosen to misrepresent
the facts in this highly political way.
Only a week ago the PM said at
Davos that public sector pension reform will save 50% of the costs
while the IFS report and release says the savings are
zero.
What is clear is that future costs
are pure guesswork but what is real is the impact on public sector
workers - higher contributions, lower benefits and later
retirement.
The GMB Central Executive Council
(CEC) meets on February 14 to consider the outcome of the talks.
The CEC is likely to refer the final proposals to GMB
members. The negative impact on them may be why they may well
say 'no' and instead opt for further action.
Under questioning in the media IFS
backtracked on the inaccurate conclusions in the
report."
End
Contact: Brian Strutton,
GMB National Secretary on 07860 606137, Naomi Cooke GMB National
Pensions officer 07739 919 633 or GMB Press Office Steve Pryle on
07921 289880 or Rose Conroy on 07974 251823.
Notes to editors
GMB assessment of points in IFS
report.
1. The IFS advance press release of
yesterday says clearly 'no savings' but their report issued this
morning is somewhat different.
2. IFS essentially says the career
average/accrual/revaluation changes versus the existing final
salary 1/60th arrangement is broadly neutral. That's true and
indeed was announced as such by Danny Alexander on 2
November.
3. IFS concedes the CPI change as a
saving. Tens of £ billions IFS conceded in media.
4. IFS mentions the contribution
increase as a saving but doesn't factor this into its
conclusions.
5. IFS doesn't recognise a later
retirement age as a saving.
6. So IFS says if you ignore
CPI savings, contribution savings, retirement age savings
and only focus on the career average/final salary comparison then
there is no saving. This is not proper analysis and seems
designed to give a deliberately misleading impression. Commentators
are right to ask “has the IFS gone political?”
7. IFS says the lower paid actually
come out with a higher pension. This repeats the assertion made
before by government and only applies if you either count longer
service to a retirement age of 68 (which is what government does)
or you skew the assumptions about salary growth to make career
average revaluation look better than final salary (which is what
IFS does). A true like for like comparison will always come out
worse.