Tuesday, 8 November 2011 10:43 AM
Unite, Britain's biggest union, has exposed Chief Secretary to the Treasury, Danny Alexander for using misleading data to attempt to manipulate public opinion over public sector pensions.
Danny Alexander made the extraordinary claim that a nurse with a full career, retiring on a salary of £34,200 would receive a pension of £22,800 a year under the proposed scheme whereas under current arrangements they would only get £17,300.
But an analysis by Unite's pensions' experts found that this example was based on a comparison of a nurse working for 43 years and retiring at age 68 in the proposed scheme and a nurse working for 35 years and retiring at age 60 in the current scheme. So under the proposed scheme the pension quoted involves working and contributing for eight years more and receiving the pension for eight years less.
Unite calculations indicate that if a like for like basis of comparison is made, based on working to the same age and the same length of service, then the proposed scheme produces worse benefits at every age up to 68.
Retiring at age 60, at the top of pay band 6, earning £34,200 the nurse would be 40 per cent worse off and at 65 the nurse would be 20 per cent worse off.
Danny Alexander also claimed that under transitional proposals those ten years or less from retirement age are assured there will be no detriment to their retirement income. When you include the loss of purchasing power during retirement on account of the indexation change to the lower CPI measure of inflation the change could reduce the value of total pension income paid during a typical retirement by a further 11 per cent.
Danny Alexander also failed to mention that the nurse and many other public sector workers will face a 50 per cent increase in their contributions, costing the nurse a further £1000 a year gross, or £65 a month after tax.
Unite assistant general secretary, Gail Cartmail said:"Danny Alexander is making extraordinary claims in order to mislead and manipulate the public about the government's pensions proposals."
"He's using distorted figures to conceal the way in which government proposals will reduce pensions. Most NHS workers will not get a pension anywhere near this maximum full-time service example, and many will have lower pay than the qualified nurse he has focused on, but all will suffer similar proportionate losses to those he is trying to conceal. Currently the average (median) pension received by NHS workers is only around £4,087."
"If the government's proposals are fair why is Danny trying to pull the wool over our eyes?"
"Danny Alexander also claimed their would be no detriment to public sector workers who are 10 years or less from retirement but conveniently failed to mention that they still face a 50 per cent increase in contributions and could lose up to 11 percent of the value of their total pension because the government is moving to a lower measure of inflation.
"The unions are telling the truth when we say the government wants public sector workers to pay more, work for longer and retire on less. We are prepared to negotiate using the facts. It is time the government dispensed with the dirty tricks and negotiated properly."
Notes to editors: The Danny Alexander's claim can be found in this statement made last week Wednesday 2 November. http://www.hm-treasury.gov.uk/statement_cst_021111.htm
"A nurse with a lifetime in public service and a salary at retirement of £34,200 would receive £22,800 of pension each year if these reforms were introduced, whereas under the current 1995 NHS Pension Scheme arrangements they would only get £17,300".
Contact: Ciaran Naidoo 07768 931 315