Superannuation Bill

Memorandum submitted by Sue Houston (SU 54)

1. This submission contains evidence regarding the implications of the Superannuation Bill 2010/11 on a 54 Year Old Civil Servant with 32 years of service. In particular, the point is made that that the imposition of this Bill clearly raises the question of denying equity of treatment under human rights for those individuals caught up by redundancy in the period of the Bill, should it obtain Royal Assent. The proposed Bill would, effectively, place a cap on existing entitled terms under the Principal Civil Service Pension Scheme (PCSPS) in the event of redundancy. It would bring about an artificial and temporary amendment to that Scheme through the Bill under which there will be no scope for arbitration or negotiation of amended redundancy/pension terms. I would be amongst the significant number of individuals likely to come under redundancy arrangements during the period of force of the Bill and I would be unfairly treated and greatly disadvantaged.

2. I am 54 years old and am a BIS citizen in the Government Office Network, located in Government Office North East (GONE). I currently work on the BIS agenda. Over the years my key roles have involved working on the economic, employment and skills agenda and managing relationships with the Regional Development Agency, One North East. I joined DTI (as was) in 1978, working on Regional Development Grants and associated issues. In 1987

I worked in DTI HQ on finance, pay & personnel policies before being seconded to the Cabinet Office in 1995 to undertake a Pay and Grading Review. In late 1998 I returned to DTI HQ in London dealing with Regional Policy and the changing role of Government Offices for DTI. From Jan 2004 I moved myself and my work to the DTI’s Billingham office. At the end of May 2005 I transferred to GONE to head up the Business & Enterprise and RDA Sponsorship Teams.

3. In July this year, the Secretary of State for CLG announced ‘in principle’ the abolition of the Government Office (GO) Network. Whilst the final details about closure will not become known until the Spending Review outcome, the GO Network is currently working up closure plans. With very few, and limited exceptions, the functions of the GO Network will become defunct.

4. In addition, with the current economic and employment position in the North East and its heavy dependency on the public sector, where in Newcastle upon Tyne alone 32% of working people are employed in the public sector, finding alternative employment will be very difficult. There will be few, if any, opportunities for those civil servants based in GONE to be redeployed elsewhere in the region, as other Government Department sites in the region too look to make cut backs and bring about redundancies, whilst at the same time redeploying surplus staff internally, to achieve resource savings. Whilst there has been some suggestion of repatriating GO staff back to their parent Department, in reality such opportunities are unlikely to exist for these reasons, even where there is another Departmental presence in the region. These conditions are likely to continue for the short to medium term at least and certainly during the anticipated period of force of the proposed Bill.

5. There is, therefore, a very significant risk of my being made compulsory redundant during the operational period of the Bill’s force, if it obtains Royal Assent.

The Principal Civil Service Compensation Scheme (PCSCS)

6. A key issue for me has been the understanding which both I, as employee, and I believe Government, as employer, have had about the entitlements I would have in the event of redundancy. Throughout my employment I have contributed to the PCSCS, based on the terms and conditions that I entered into when I joined the Service. My entitlements, upon redundancy, were clearly set out in the document ‘Pension Choices’ which brought about the three new, ‘classic’, ‘classic plus’ and ‘premium’, schemes in October 2002. The extract of that document (pages 36 – 41 book form) entitled ‘What happens if I am made redundant –‘ clearly sets out the details, and provides worked examples, of those particular terms. In my particular case, page 38 ‘I am aged between 50 and 60’ makes clear the redundancy package I will receive. Those particular entitlements were, amongst others, those upon which individuals were asked to make an informed decision about their pension choice, and also in the knowledge of which other responsible financial planning decisions were subsequently taken by individuals.

7. In the light of this, I consider that such entitlements will and should continue until a proper and consulted upon/negotiated change to the Scheme is proposed. I do not consider it is fair, just or transparent that a proposed cap on the limits of the Scheme, in other words an amendment to its current entitlements, should be brought about by the proposed Bill. Whilst I understand that the Bill is promoted as a temporary arrangement, with a sunset clause and the opportunity for its repeal any time during its term, none of this will afford equity of treatment to any individual subject of agreed voluntary or compulsory redundancy after its coming to force with any like civil servant of same age, years of service etc, either before the Bill comes about or after it gives way to any permanent, amended, Scheme terms.

8. On a personal level, the Bill will impose changes which will amount to a reduction of two thirds of my existing entitlement, both in reducing my pension lump sum and removing an Annual Compensation payment, by way of access to an early unreduced pension, which I had understandably factored into my future financial planning and which I cannot now make any retrospective provision to restore. This leaves me with serious financial implications for my family of which my husband , who is self employed, took a significant pay cut to keep his business afloat in 2009 and is just to say managing to keep his head above water as we emerge from the recession, my 27 year old son who we are supporting as he starts an engineering degree course in October and my mother-in-law who we are supporting in a residential home as she is suffering from the advanced stages of Alzheimer’s . These other family circumstances are only somewhat mitigated if my current entitlements are, as they should be, received by me upon redundancy.

9. I consider that the Bill terms would be inequitable and against my human rights principles if, arbitrarily, imposed without the natural justice and appropriate consultation and agreement which should be afforded to any amendment of the magnitude proposed to the PCSPS entitlements. Any proposed changes should be subject to Transitional arrangements with, perhaps, a grace period allowed under which existing entitlements would be honoured. These are arrangements which are hinted at will be considered by Government under the permanent change proposed to the Scheme. In the meantime, I consider the Bill would be inequitable to me because –

· If, as is likely, I am made redundant during the force of the proposed Bill, my redundancy terms will be inequitable with those civil servants of like age and period of service, who have left immediately prior to the Bill and, likely, after its repeal or cessation;

· Being over 50, I am no longer afforded the Annual Compensation Payment which my current entitlement provides me with and upon which annual income my future financial planning relied upon. I consider this age discriminatory, given that such entitlement to unreduced pension, from age of 50, is considered to be mine now as of accrued right;

· The absence of redeployment opportunities in the event of redundancy, means that my existing entitlement to an Annual Compensation Payment (access to unreduced early retirement) is a critical income of which I would by the Bill now to be denied; and

· Absence of appropriate notice of prospective changes to the PCSPS of the magnitude proposed by the Bill renders it impossible for me to restore and have access to, by another pensionable means, the compensatory entitlements that I have accrued over years.

10. I do not therefore consider it is acceptable for Government to simply take a repressive stance and remove current redundancy and pensionable terms and conditions with what will be immediate effect. I would urge you to greatly consider the situation I and my Government Office colleagues are in with regards the imposition the proposed Superannuation Bill will cause and look forward to you favourably to retain our current entitlements under the PCSPS until they might otherwise be replaced by amended permanent, negotiated, terms.

September 2010