1 in 4 Not In Council Pension
Tuesday 3rd May 2011
ONE IN FOUR COUNCIL WORKERS ALREADY
OPTED OUT OF PENSION SCHEME SHOWS PROPOSED CONTRIBUTION INCREASES
TO LOCAL GOVERNMENT PENSION SCHEMES WOULD BE A
DISASTER
Government proposals to increase contributions by 3.2%
to 9.6% will make this worse, jeopardising the entire Local
Government Pension Scheme for its four million members says
GMB
A new GMB study shows that the participation rate in the Local
Government Pension scheme (LGPS) ranges from a low of 46% in
Central Bedfordshire to 99% in Sheffield. In 46 councils one in
four or more of all council workers including low earning care
workers, teaching assistants, cleaners and support staff are not
members of the pension fund. The study also shows that in the five
years to 2011 these has been a 7% overall drop in workers
participating in the LGPS. Overall 1 in 4 workers elegible to be in
the scheme are opted out of the scheme concluding that they cannot
afford to be in the Local Government Pension Scheme. The overall
participation rates for 118 Councils in England are shown
below.
GMB established that data on participation rates in the current
Local Government pension scheme using the Freedom of Information
Act. GMB says that this data proves that increasing the
contribution rate by 3.2% from 6.4% to 9.6%, as part of the
proposed £1billion Osborne Pension Tax which is the target
Treasury yield from the higher employee contribution rate of 9.6%,
will drive thousands more away from pension saving while doing
nothing to increase the funding level of the scheme. See Note 1 and
2 below.
Percentage of eligible employees participating in the Local
Government Pension Scheme according to responses received from 118
Councils by GMB to a Freedom of Information request.
|
COUNCIL
|
PARTICIPATION RATE
|
|
Central Bedfordshire
|
46%
|
|
Enfield
|
50%
|
|
Darlington
|
55%
|
|
Stockton on Tees
|
55%
|
|
Kingston
|
56%
|
|
Middlesborough
|
57%
|
|
East Sussex
|
58%
|
|
Tower Hamlets
|
58%
|
|
Hertfordshire
|
59%
|
|
Portsmouth
|
59%
|
|
Lancashire
|
60%
|
|
Isles of Scilly
|
61%
|
|
Barking & Dagenham
|
64%
|
|
Dudley
|
64%
|
|
Essex
|
64%
|
|
Plymouth
|
64%
|
|
Bradford
|
65%
|
|
City of London
|
65%
|
|
Slough
|
65%
|
|
Newham
|
66%
|
|
Swindon
|
66%
|
|
Worcestershire
|
66%
|
|
Bristol
|
67%
|
|
Hartlepool
|
67%
|
|
Cornwall
|
68%
|
|
Greenwich
|
68%
|
|
Sandwell
|
68%
|
|
Rutland
|
69%
|
|
Sunderland
|
69%
|
|
Bracknell Forest
|
70%
|
|
Camden
|
70%
|
|
Haringey
|
70%
|
|
Leeds
|
70%
|
|
Luton
|
70%
|
|
Walsall
|
70%
|
|
Bolton
|
71%
|
|
Durham
|
71%
|
|
Liverpool
|
71%
|
|
Windsor & Maidenhead
|
71%
|
|
Brighton
|
72%
|
|
Halton
|
72%
|
|
Hull
|
72%
|
|
West Sussex
|
72%
|
|
North Tyneside
|
73%
|
|
Herefordshire
|
74%
|
|
Lambeth
|
74%
|
|
Hampshire
|
75%
|
|
Isle of Wight
|
75%
|
|
Leicestershire
|
75%
|
|
Redcar
|
75%
|
|
Wandsworth
|
75%
|
|
Kent
|
76%
|
|
Manchester
|
76%
|
|
Warwickshire
|
76%
|
|
Barnet
|
77%
|
|
Bedford
|
77%
|
|
Cheshire West & Chester
|
77%
|
|
City of York
|
77%
|
|
Leicester
|
77%
|
|
Wolverhampton
|
77%
|
|
Kirklees
|
78%
|
|
Medway
|
78%
|
|
North East Lincolnshire
|
78%
|
|
Rochdale
|
78%
|
|
Staffordshire
|
78%
|
|
Telford
|
78%
|
|
Blackpool
|
79%
|
|
Cheshire East
|
79%
|
|
Gateshead
|
79%
|
|
Hammersmith & Fulham
|
79%
|
|
Oxfordshire
|
79%
|
|
Surrey
|
79%
|
|
Waltham Forest
|
79%
|
|
Wokingham
|
79%
|
|
Solihull
|
80%
|
|
South Gloucestershire
|
80%
|
|
Bath & NE Somerset
|
81%
|
|
Buckinghamshire
|
81%
|
|
Milton Keynes
|
81%
|
|
North Yorks CC
|
81%
|
|
Redbridge
|
81%
|
|
Gloucestershire
|
82%
|
|
Sutton
|
82%
|
|
Wirral
|
82%
|
|
Barnsley
|
83%
|
|
Bournemouth
|
83%
|
|
Islington
|
83%
|
|
Northumberland
|
83%
|
|
Peterborough
|
83%
|
|
Sefton
|
83%
|
|
Stoke
|
83%
|
|
Trafford
|
83%
|
|
Birmingham
|
84%
|
|
Doncaster
|
84%
|
|
North Somerset
|
84%
|
|
Ealing
|
85%
|
|
Harrow
|
85%
|
|
Lincolnshire
|
85%
|
|
Nottingham City
|
85%
|
|
Wakefield
|
85%
|
|
Bromley
|
86%
|
|
Calderdale
|
86%
|
|
Cambridgeshire
|
86%
|
|
Rotherham
|
86%
|
|
Southwark
|
86%
|
|
Westminster
|
86%
|
|
Hackney
|
88%
|
|
Hillingdon
|
88%
|
|
Derbyshire
|
89%
|
|
North Lincolnshire
|
89%
|
|
Nottinghamshire
|
89%
|
|
Newcastle
|
92%
|
|
Derby
|
95%
|
|
Lewisham
|
95%
|
|
Somerset
|
95%
|
|
Richmond
|
96%
|
|
Bexley
|
97%
|
|
Sheffield City
|
99%
|
Brian Strutton, GMB National Secretary for Public Services,
said, "Low paid council workers have had a two year pay
freeze and are finding it increasingly hard to save for their
retirement as our survey shows. Government proposals to
increase contributions by 3.2% to 9.6% would make this worse,
jeopardising the entire Local Government Pension Scheme for its
four million members. We need sustainability and fairness
that encourages people to invest in their retirement and not be
reliant on welfare benefits.
The Chancellor is insisting on raising £1 billion from
the LGPS in a tax that will see central government grants to local
authorities cut and contribution income to the scheme plummet as
members leave the scheme. In a survey of more than 2,000
scheme members 39% said they would leave the scheme if the average
contribution rate increased to 9.6%.
The LGPS pays out on average £4,200 a year to LGPS
pensioners, the lowest in the public sector and has an annual
positive cash flow of £4billion. Yet the Chancellor seeks to wipe
this out overnight with a doomed policy that will destroy what
should be a viable, sustainable means of funding retirement for
millions of front line public sector workers.
Government has said that it wants people to save for
retirement but is failing to ensure low paid workers stay in their
pension scheme. This causes the legacy of under saving that
the Turner Commission warned about five years ago, a legacy that
will leave millions in poverty in later life.
As the government prepares to introduce auto-enrolment
in the private sector it should be examining why 20 years of
auto-enrolment to a good quality scheme still leads to a quarter of
local authority employees opting out."
End
Contact: Brian Strutton 0208 947 3131 or 07860
606 137 or Naomi Cooke 07739 919 633 Phil McEvoy 0208 947
3131 or GMB Press Office 07974 251 823 or 07921 289880
Notes to Editors:
1. Between December 2010 and
January 2011 GMB conducted an online survey of members of the
LGPS. 2,000 members participated with 39% indicating they
would leave the LGPS if a 3% increase was applied to all
contribution rates evenly and 53% indicating they would leave if
the contributions were increased by the amount needed to insulate
those earning less than £18,900 but still generating 3% increase in
yield demanded by the Chancellor. http://www.gmb.org.uk/newsroom/other_news/900m_stealth_tax.aspx
2. In order to generate the £900m
the Chancellor has demanded from the LGPS in England & Wales (a
further £140m is required from the LGPS in Scotland) DCLG have
estimated that contributions will have to increase to 15% for the
highest paid in order for the lowest earners to remain at their
current contribution rate. Some basic rate taxpayers would
see their contributions increase to 11%. The main reason for
this is that around 40% of LGPS members earn less than £19,000 a
year whereas only 7% earn more than £42,000.