40,000 low-paid workers in schools and councils get pension hike reprieve
More than 40,000 local government workers will not have to contribute more into their pension fund, the Environment Minister has announced.
Alex Attwood said that the 44,000 workers will be exempted from hikes in public sector pensions, which take effect from this month.
Local government workers who will benefit are typically the lowest-paid public service employees — including bus drivers, refuse collectors, classroom assistants and school catering assistants.
Public service union Nipsa welcomed Monday’s announcement as a “short-term victory”.
However, Bumper Graham, Nipsa’s assistant general secretary, added: “It can be welcomed in the sense that there’s no immediate additional payments coming out of public servants’ pay — at a time when they are not getting any pay increase.
“But it’s a short-term victory. The (wider) issue has not gone away. We are in this for the long fight.”
The local government workers affected by the move all contribute to Northern Ireland’s Local Government Pension Scheme (LGPS) — which, unlike other public sector pension packages, is partially funded by Government and taxpayers.
Making Monday’s announcement, Mr Attwood said he was against the pension hikes for the low-paid workers.
He said: “I have made the case this should not happen and given the nature of the local government pension scheme, the profile of members, that there was a better way to do reform.
“My arguments have now prevailed.
“All of the people belonging to this scheme provide important services which we all avail off.
“Many have a low salary for them and their families to live off. I am therefore committed, especially in these harsh economic times, to have a pension scheme which is fair and affordable to members, employers and the taxpayers who ultimately fund the scheme.”
He said the move made space for trades unions and employer representatives to start a discussion on pension reform.
“This will now happen,” he said.
“I have asked the employer and trades union representatives to make recommendations to me on how to meet that challenge.
“There will be changes, but I will work to ensure that future changes are the best for members and protect those on lower incomes.”
But Mr Graham said there was never a case for increasing workers’ contributions because of the make-up of the local government pension scheme — which meant revenue generated would not have benefited the UK Treasury.
If Alex Attwood had pushed ahead with increases in pension contributions, local government workers would have faced an average increase of 3.2% in their pension contributions over the next three years. This affects the lowest-paid workers, from bus drivers and refuse collectors to classroom assistants and school catering assistants — who have had no pay increase for the last number of years. They are already facing a 15% dip in their pensions.