A Taxpayers’ Alliance report on local government pensions has been branded “flawed and inaccurate” by negotiators behind the latest reforms to the scheme.
Employers and unions have both expressed frustration with the pressure group’s latest report into the finances the Local Government Pension Scheme, accusing it of “cherry picking the facts”.
Based on Freedom of Information requests, the report found the number of active members for every one pensionable member fell from 1.9m in 2006-07 to 1.6m in 2010-11, leading the TPA to describe the scheme as a “ticking financial time bomb”.
But Sir Steve Bullock (Lab), chair of the LGA’s workforce board which has overseen recent reforms to the scheme due to be implemented in 2014, said the TPA’s “simplistic and misleading analysis reaches several flawed and inaccurate conclusions”.
He added: “The LGPS funds in England and Wales hold £145bn in investments and assets, enough to pay benefits for more than 20 years. The scheme currently has £4bn more being paid in each year than is taken out, and the amount councils allocate to pension contributions represents just a small fraction of their budgets.”
Union leaders who have negotiated the reform deal with the LGA were even stronger in their criticism.
Heather Wakefield, Unison’s head of local government, said the TPA “never lets the true facts get in the way of an opportunity to attack public spending or public services”.
“Time and time again, the group makes the same, tired old claims about local government pensions,” she said. “They are cherry picking the facts.”
Brian Strutton, GMB’s national secretary for public services, accused the TPA of “scaremongering” about a scheme that was 80% funded and “recognised as one of the largest, strongest and best run occupational pension schemes in the world”.
“I think everyone who has a modicum of knowledge about the LGPS is heartily sick of the regular attempts by the ‘Taxdodgers Alliance’ to undermine the scheme.”
He added: “Most significantly of all, the TPA seems completely unaware that the LGPS has just renegotiated its cost and benefit structure to take effect from 2014 which saves employers around £600m per annum while employees maintain their contributions at current levels.”
Unions and the LGA were also critical of the TPA’s failure to recognise that a 300,000 increase in the number of deferred members between 2006-07 and 2010-11 had occurred as councils made large scale redundancies, with 240,000 jobs cut in the last year alone.
Sir Steve said “a key element” of the 2014 scheme were measures designed to encourage more employees to sign up to the scheme as this would help “mitigate the thousands of redundancies which resulted from the 28% cut to council budgets”.
The new scheme includes fairer arrangements for part-time staff, who currently pay pension contributions on a full time equivalent basis, and a 50-50 arrangement for members who would like to reduce the cost of contributing to their pension.