Ambitious Enough? The future of workplace pensions

John Gray is UNISON National Executive Council Member for Community & Voluntary sector

On Tuesday morning there was a TUC seminar on workplace pensions Chaired by Assistant General Secretary, Kay Carberry. Keynote speaker was Minister for Pensions, Steve Webb MP.
In his speech he promoted his vision of “Defined Ambition” pensions.  He thinks that Defined Benefit (DB) schemes are finished outside the public sector but wants something better than Defined Contribution (DC). Problem with DB is cost to employer and volatility, while problem with DC is uncertainty and protection against inflation.  He wants something that is not as good as before (DB) but better than the minimum (DC).

 

He suggested that employers may pay an insurance company (as a company perk) to protect the value of a DC scheme so that on retirement you would get at least your contributions back. He also said that what employers want with pensions is a level playing field and they don’t want to pay more than competitors.

 

My question to him was that are we just trying to reinvent the wheel? If workers need certainty and inflation protection then the answer can only be DB. A reformed DB, where you look for example at employer caps in contribution (I forgot to mention smoothing). In Japan nearly 100% of pension provision is still DB, while in South Korea which has amongst the world’s longest life expectancy they are still opening new DB schemes. If companies want a level playing field then introduce compulsion.

 

He replied that he did not know why DB was still so prevalent in Japan. He thought it may be related to inflation? He also said it would be inconceivable to get political consensus in the UK  to agree to DB pension compulsion in the UK.

 

Which I would agree with. It will be impossible to get consensus from right wing Tories. That is why the next Labour Government with a decent Parliamentary majority should just do it, because it is the right (or rather left)  thing to do.

 

You can check out my twitter comments on the rest of the seminar here.  There were some really fascinating contributions from other panel members: Doug Taylor from “Which?”; Professor Orla Gough from Westminster Business School and Craig Berry from the TUC.

 

I had another chance at a question towards the end of the seminar, where I asked the panel that there is a lot of interest currently in “Predistribution” and the concept of a living wage, since the taxpayer should not be spending money subsiding bad employers who pay poverty wages. So should we in the pensions world be also talking about a “living pension” and not allowing bad employers who don’t provide one to subsidised by taxpayers as well?

 

Not sure if I got a full response from Panel. Craig Betty was supportive but  DWP civil servant, Mike le Brun, who took Steve Webb’s place on the panel said that individuals will have to take more responsibility for their own pensions. In DB they were passive but in DC they must be active.

 

Which would seem to contradict his Minister comments about the problem with DC being that individual workers cannot understand the uncertainty and the inflation risk.

 

If the best brains in the Treasury and the City of London cannot accurately predict return and risk then what chance does Joe Public have with their DC pensions?

 

Unions21 is publishing an article on Defined Ambition pensions in the first report from the Fair Work Commission. The report will be launched at the Unions21 Annual Conference on 8 March.

Unions and the internet: 65% of new members in my branch now join on-line

John Gray from UNISON

John Gray is UNISON National Executive Council Member for Community & Voluntary sector

Unions21 held a Tech Seminar on 24th Jan

 

Held in the headquarters of the CWU, the room was packed with national union officers and lay activists.

 

Simon Sapper from the CWU kicked off by posing the question: What do unions want to achieve online? Is it a organising or servicing tool or is it both?

 

Paul Hilder (Global VP Change.org & 38 Degrees co-founder and Director) and John Coventry spoke passionately about the idea that “anyone can do it” by e-petitions and online campaigning. They gave examples of the individuals who have taken on loan sharks, Amazon tax avoidance and even BBC Newsnight bullying.

 

I asked a question to them over something which has long been a niggle of mine. “I am a great fan of new social media, but what is the end game of on line campaigning and how will it translate into greater union membership and changing politics since at the end of the day you will have to rely on traditional Party politics to bring about change”? Paul gave a good answer that on line campaigning could justify itself by attracting people to start a journey that they otherwise would not be attracted by. I’m still not 100% sure.

 

Gregor Poynton (Blue State Digital) gave a slick presentation (of course) on how unions can do better with online campaigns. A ladder of engagement starting off with getting members to spend 15 minutes a day online supporting causes rather than being expected to commit to hours and hours of boring committees and meetings.

 

Ed Mustill (Labourstart) plugged their new guide on online campaigning (which I bought off him for £3) and compared (rightly in my view) online support for trade unions fights with being on a freezing cold picket line and a passerby comes up out of the blue with hot coffee and biscuits.

 

Gavin Hayes (Policy Review TV) gave a convincing pitch on why we should consider not spending say £40k on venue and transport costs for 100 people to attend a national meeting and instead £3-4k on setting up an on-line TV video facility.  This could attract a much, much wider participation for potentially peanuts. Makes perfect sense to me. Read More…

For A Future That Works Make An Action Plan To Deliver The Spirit Level Agenda

happy face, sad face pictureThe Spirit Level, Unions and an alternative economic policy

 

Over 100,000 copies of the book “The Spirit Level” have been sold and its authors Professors Richard Wilkinson and Kate Pickett have spoken at over 600 lectures and events all over the world.

 

Trade unionists are instinctively sympathetic to research that finds the greater the income equality in a country the better it is for everyone. What I have always found to be more fascinating is that the more equal societies tend to have higher densities of trade union membership and influence. Where you have stronger trade unions you find better pay and greater social benefits for the many.

 

I think the empirical research underpinning the Spirit Level is compelling but a weakness (which its authors’ acknowledge) is how do we actually bring about greater equality?

Read More…