Unite exposes Danny Alexander for misleading public opinion on
public sector pensions
8 November 2011
Unite, Britain's biggest union, has exposed the 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 £1,000 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 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."
ENDS
Notes to editors: 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
