REVIEW OF PUBLIC SECTOR PENSIONS 2009. STARTING POINTS.
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Transcript of REVIEW OF PUBLIC SECTOR PENSIONS 2009. STARTING POINTS.
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REVIEW OF PUBLIC SECTOR PENSIONS 2009
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STARTING POINTS
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Government’s 4 Principles
• SIMPLICITY
• AFFORDABILITY
• GOVERNANCE
• TOTAL REMUNERATION
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3 STRANDS OF DEVELOPMENT
• SUPERANNUATION ACT 1984
Breaks link with UK
• GOVERNANCE ARRANGEMENTS
2009 – we must apply UK Governance
• PUBLIC SECTOR REVIEW OF PENSIONS
4 principles/unified pension scheme
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How does the current review approach the
issues?
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Review/Superann Act 1984
4 Principles
New Scheme Consultation
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Benefits of current approach?
• Revolutionary?
• Achieves Government Aims?
• Immediate?
• Simple?
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Disadvantages?
• Too quick?
• Industrial Relations Issues?
• Untried/tested?
• On island expertise?
• Sustainable/affordable?
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How are we proposing to change that
approach?
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Review/Superann Act 1984
4 Principles
Negotiation on the Approach
Consultation on the detail
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Superannuation Act 1984/
Break with UK
Governance/Self sustaining
schemes
Public Sector Review/
New pensionscheme
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Benefits of our approach?
• Evolutionary?
• Achieves Govt aims?
• Protects our members & the public purse?
• Resolves major IR issues?
• Flexible/pick n mix?
• Additional rationale for change?
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Disadvantages?
• Cash flow in short term?
• NHS?
• Slower/more conservative change?
• Still needs expertise?
• More complex than current proposals?
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Superannuation Act 1984
• Change not just around breaking UK link
• But it has become about that
• Members and politicians want decision making
on major change to remain primarily with
Tynwald
• Breaking the link with the UK
Problems/Transfer Club
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Governance• Change - determined by valuations/viability of the
scheme• Governance groups agree change on an ongoing basis• Groups - 10 people - equal employer/employee
representation • UK schemes are run or are moving towards being run on
this basis• Over 99% of Prospect members voted in favour of
Governance groups• Why? Fair and self sustaining
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Governance - if we follow the UK
Harbours1.5%
LeisureServices
5%
FSC1.5%
IPA1.5% Officers
Of theBoards1.5%
NatTransport
5%
Whitley5%
MEA6%
ManxRadio6.5%
PCSPS1.5%
GovGroups
Too many groups
Differing valuations
Different from UK
Different outcomes
We break the link with the UK
10 groups
3 sections
Leisure Services has 1 member
Same scheme – Different % rates
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Governance – if we follow the UK
PCSPS – 3 sections
•10 schemes
•10 valuations
•10 Governance groups = 100 people
•Valuations will differ/differ from the UK
•So change will be different from the UK
•Inbuilt and irreconcilable factor
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Governance
THE BREAK WITH THE UK MUST HAPPEN
REGARDLESS OF ALL OTHER DEVELOPMENTS
THE LINK WITH THE UK MAKES THIS
PARADOXICALLY
AN ABSOLUTE REQUIREMENT
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But we can then modify to…
Over 1.5%schemes
New scheme
1.5% schemes
GovGroups
These groups could be one group?
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Manx Governance
•Retain the schemes
•Close them to new entrants
•Change the SA 1984
•Adopt Governance - a modified UK model
•1 or 2 Governance groups max
•Apply to other schemes e.g. NHS/Teachers
•A new scheme…..
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Public Sector review
• Based on the outcome of the current review
• Permanently open to anyone who wishes to join
• Movement may be generated by numerous
factors
E.g. NUVOS members – this scheme worse
than that currently proposed
• Governance group for new scheme
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Pensions Office/Board
Governance Groups
Treasury
Employers
Tynwald
Pensions Board
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Pensions Office/Board
•An independent body to oversee and liaise on
• Pensions strategic development & management
• Administration and operational delivery
• Strategic workings of the different interest groups
i.e. Governance groups, Tynwald, employer groups
etc.
• UK resources/development/expertise
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Copying the Principle
•Apply the approach to other schemes
e.g NHS/Teachers
•Take account of specific issues
e.g. recruitment/retention/transfer club
•We are moving towards uniform schemes
e.g. Teachers becoming like PCSPS
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Conclusions
• Evolved & consensus approach
• Voluntary and staggered approach
• Integrated approach
• Pick n mix approach
choose the best
exclude the worst
draw on UK expertise/experience
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Conclusions
• SIMPLICITY less schemes, long term – ONE
• AFFORDABILITY self sustaining
• GOVERNANCE robust, partnership approach
• TOTAL REMUNERATION flexible enough to meet the needs of differing
groups