The increased contributions to the pension fund for social housing staff should not be used as an excuse for housing association bosses to provide inferior pension provision for employees.
Unite, the country’s largest union, fears that housing association executives will opt for less generous pension schemes, following the latest contribution increases that associations pay into the Social Housing Pension Scheme (SHPS). The SHPS is currently grappling with a £1.32 billion deficit.
Unite, which has 10,000 members in the housing sector, reiterated its commitment “to fight for good quality pensions that will provide a decent income for our housing members in their retirement”.
Unite national officer for the not for profit sector Sally Kosky said:
“Alarm bells are certainly ringing that the SHPS deficit could kick-start a trend where employees are moved from a defined benefit (DB) scheme to a defined contribution or ‘money purchase’ scheme, which relies on the vagaries of the stock market as to what you may get on retirement.
“The employers have a choice on how to respond and we don’t want the defined benefit schemes closed, with the SHPS’ demand for increased contributions being used as an excuse for downgrading pension provision.
“We don’t want our members taking this financial hit, as housing association managements have been squeezing the pay and terms and conditions of our members for a number of years – enough is enough.
“While staff are having their living standards throttled, housing associations always seem to manage to increase CEO pay and pension pots very generously on an annual basis.
“Housing associations continue to pile up record surpluses on a yearly basis, with growing assets and relatively low gearing in terms of borrowing costs.
“Unite is committed to maintaining DB schemes and we have been prepared to put that into action supporting groups of workers defending their pension.
“Penny-pinching bosses should not underestimate Unite’s determination to support our members in the fight to have a decent pension for their retirement.”
The nature of SHPS is that it allows employers a choice of different benefit options they can offer to their employees and a choice of what contributions they ask members to pay towards the cost of those options.
Basically, SHPS has increased the cost of all the DB options on that menu of choice – hence Unite’s concern about their future.