GMB WANTS WORKPLACE PENSION PROVISION TO BE WISED UP NOT DUMBED DOWN

GMB supports good levels of workplace pension provision as being the best method of avoiding increased levels of pensioner poverty and increased pressure on taxpayers due to more reliance on state benefits.

We believe that the current regulatory regime is flexible enough to sustain decent pension schemes.  What needs to change are attitudes to scheme flexibility and the approach many employers take to their pension scheme. 

GMB has called for many years for occupational pension provision to form a part of the core collective bargaining terms.  The current consultation requirements generally serve as little more than an exercise in advance notification of pension changes.  With the forthcoming introduction of mandatory workplace pension contributions now is an ideal juncture to incorporate pensions into the collective bargaining agenda.  If pay and other benefits can be negotiated, then why shouldn't pension provision be subject to similar consideration?

Many changes seen in recent years have involved adjustments to the traditional defined benefit model which hasn't changed the nature of the scheme, just the benefit provision.  For example there is nothing that would prevent ongoing reviews resulting in changes to accrual rates, retirement ages or the definition of pensionable earnings (this latter item would be more suitable to a career average model).

The difference going forward is that the expectation would be that these changes would not all be "one-way" or that they would be agreed with a guarantee of a further periodic review.  For example a reduction in accrual when a business is struggling could be made good again as and when profitability is restored. 

A commitment to include pensions in the core bargaining terms would be a necessary show of good faith and would be helpful in improving the responsiveness of pension provision to the needs of the workforce and employers.

The interaction between normal pension ages and retirement ages is important.  If government sensibly remove the mandatory retirement age, normal pension age will become a determining factor in many individuals' decisions to leave employment.  Flexible retirement needs to become more of a reality in the UK to facilitate workforce planning and to deal with the ageing population and insufficient pension saving. 

GMB members have demonstrated their strength of feeling on the value of retaining decent occupational pensions in the past and continue to prize good pensions as core employment terms.  Our members, who work in all sectors of the UK workforce, have proven themselves capable of engaging in successful reform where open and meaningful negotiations have been entered into. 

What we do not accept is that racing to the bottom and abandoning decent occupational schemes is in the country's best interests.  Employers need to commit to a long term view of pension provision and not react unnecessarily to short term market forces.  Employees, for whom pension schemes are set up and run, should be allowed the opportunity to negotiate their deferred pay.  Only with this change can a sustainable occupational pension environment be achieved.

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