Public Sector Compensation Scheme 2013 Public Sector Pensions Authority Consultation.
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Transcript of Public Sector Compensation Scheme 2013 Public Sector Pensions Authority Consultation.
Public Sector Compensation Scheme 2013
Public Sector Pensions Authority Consultation
Compensation Scheme - Introduction
Aims and Objectives of this Presentation
Joint presentation Employers/Unions
To outline the proposed new Public Sector Compensation Scheme
Give you the opportunity to ask questions and to provide clarification
Provide details of how to participate in the consultation
Compensation Scheme
What is the Public Sector Compensation Scheme for?
The Compensation Scheme provides benefits for loss of office• Voluntary Redundancy• Compulsory Redundancy
Not a Mutually Agreed Resignation Scheme (MARS) or a Voluntary Resignation Scheme (VRS)
Compensation Scheme
How have we got here?
Interim arrangements are in place for between 1 - 3 years from implementation of Unified Pension Scheme (now in year 2)
Council of Ministers determined a review should be carried out
Public Sector Pensions Authority Working Group, Chaired by the Vice Chair of the PSPA
Compensation Scheme - Introduction
Why is Scheme being revised?
• Current arrangements are complex, costly in terms of pension enhancements, varied and require modernising
• Simplify and harmonise compensation benefits across the public service
• Other considerations:
- Existing employees - Labour Market
- New Joiners - Private Sector
- Taxpayer
• Supporting continuing economic success
- Keeping people in employment
• Available to all including those not in the Unified Pension Scheme
Compensation Scheme
Who is covered by the proposed Scheme?
Majority of Public Sector Workers
Full details are in Schedule 1 of the Scheme
Compensation Scheme
Who is not covered by the proposed Scheme? Teachers/Lecturers Fire Fighters Constabulary Manx Radio staff GP/Dental Practice staff Medical/Dental
Practitioners (under a contract for services)
Hospice staff Local Government staff
JudiciaryAttorney GeneralMedical Officer or Chaplin (prison)
Full details are in Schedule II of the Scheme
Current Position – IoM Public Service
Current Position – Isle of Man Public Service:
Civil Servants/Manual Workers etc- Compulsory/Flexible Early Retirement (Over 50 years)- Approved Early Retirement (Over 50 years)- Compulsory/Flexible Early Severance (Under 50 years)
NHS– Up to 24 months’ pay for compulsory redundancy– Up to 24 months’ pay for voluntary redundancy– No additional pension enhancement
Current Position - Benchmarks
Current position – Benchmarks:
United Kingdom Civil Service– Up to 12 months’ pay for compulsory redundancy– Up to 21 months’ pay for voluntary redundancy– No additional pension enhancement
Private Sector– Statutory Minimum – 1 weeks’ pay per year of service (capped at
£480 per week)– Large Businesses – many capped at 12 months’ pay
Provisions of the Proposed Scheme
Main features:
Provision of a compensation lump sum for new and existing public servants
No automatic right to an enhanced pension
- Pension and this scheme are separate
Provisions of the Proposed Scheme
Main Features:
New starters:• Up to 12 months’ pay for compulsory redundancy • Up to 18 months’ pay for voluntary redundancy
Applicants declined voluntary redundancy who are made compulsorily redundant will be entitled to voluntary terms
Compensation will be paid on the basis of a deemed salary of no less than £25,000 per annum
Transitional Arrangements
Based on implementation date of the Scheme:
All staff up to age 45 years: maximum compensation lump sum of 18 months pay for compulsory redundancy and 24 months for voluntary redundancy (based on 1 month’s pay for each year of continuous service)
Transitional Arrangements
Based on implementation date of the Scheme:
Staff aged 45 years and over:maximum compensation lump sum of 24 months pay for voluntary and compulsory redundancy (based on 1 month’s pay for each year of continuous service)
Age Profile of Workforce (excluding Police/Fire/Teachers/Lecturers)
24 & Under 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 650
200
400
600
800
1000
1200
1400
16
7
36
2
44
9
60
1
99
0
12
99
12
98
97
0
57
6
2.5
%
5.4
%
6.7
%
9.0
%
14
.7%
19
.4%
19
.3%
14
.5%
8.6
%
Age Band
Nu
mb
er o
f P
eop
le
Length of Service - % of Workforce
(excluding Police/Fire/Teachers/Lecturers)
0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-490
200
400
600
800
1000
1200
1400
1600
1800
2000
1505
1812
1540
688
523
304
199
10036
522.4% 27.0% 22.9% 10.3% 7.8% 4.5% 3.0% 1.5%
Years
Nu
mb
er o
f P
eop
le
0.5% 0.1%
Conclusions
More than 60% of the workforce are aged 45 years and over
Very few staff under 45 years of age will have achieved more than 18 years service
Many staff over 60 years will receive improved benefits
Provisions of the Proposed Scheme
Pension Enhancement Options:
Staff made redundant aged 50 or over will have the option to use some or all of their compensation payment to purchase added service
Staff made redundant aged between 50 and 55 will be able to buy additional service but pension will not be paid before the age of 55
Staff will be able to buy as much or as little additional service as they wish up to the maximum available through the use of the compensation lump sum
Transitional Arrangements
Based on implementation date of the Scheme:
All staff aged over 50 years:will have the option to use some or all of their compensation payment to purchase enhanced added service to increase their pension. Three year transitional arrangement.
Union View
UK Scheme Changes 2010 (Civil Service only) - means detrimental change was inevitable
GUS negotiations - Unions negotiated a period of up to 3 years no change
Aim – improved benefits compared to the UK Civil Service
Aim – ensure pension could be enhanced for those nearing pension age via improved lump sum provision
Aim – transition arrangements for existing members, those nearing retirement, and low paid amongst others
Union View
Current proposals – we would like to see them improved. Examples include:
Key change – existing members should be subject to the same provisions for the life of their employment
Key change - Standard minimum 3 month redeployment and 3 month notice periods across the public sector in cases of compulsory redundancy
Key change – 12 months compulsory and 21 months voluntary for new starters
Union View
Each union will submit a response to the consultation in respect of our members views
We need EVERY union member to input to the consultation individually and we will issue guidance on how you might do that
After the consultation, the scheme will be negotiated through individual forums/members will be balloted
COMIN has agreed that moving these provisions into collective bargaining should be further explored
Next Steps
Public Consultation/Joint BriefingsFinalisation of the Scheme by PSPA Trade Union ballotsPSPA ApprovalNew scheme implementedTynwald Approval
Compensation Scheme – Information
More information on the consultation can be found on the Public Sector Pensions Authority website:
www.pspa.im
Any Questions?