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Threat to housing workers’ pensions: Unite will resist


Unite to resist any changes that result in a detriment to our members.

 

Around ten thousand housing workers could face attacks to their pension schemes following the announcement this week of further increases in the deficit of the biggest pension scheme in the sector.  Employers have been told that the deficit on the Social Housing Pension Scheme (SHPS) will increase to £1.5bn, meaning employers will have to increase their contributions to pay it off by 50%.

 

Unite National Officer Siobhan Endean is quoted in Inside Housing “Unite will resist any changes that individual social housing organisations attempt to make to their pension schemes if it will result in a detriment to our members.

 

Deferred pay

 

“Pensions are deferred pay and members will not stand idly by if their employer is intent on cutting their retirement income.” Unite reps will be seeking assurances from management and the issue will be discussed at the Unite housing workers pay conference on Friday 26th October.

 

Inside Housing report “The housing associations that will be hit hardest by the change are those with employees on ‘defined benefits’ schemes – pensions which pay a guaranteed amount on retirement. As well as increased contributions, they will see the cost of future benefits rise by 30%.

 

Avoiding costs

 

According to pensions experts, many housing associations will seek to avoid these costs by moving employees on defined benefits to defined contributions, which are calculated based on the amount paid in and are less generous as a result.” Approximately ten thousand workers are on defined benefit schemes.

 

Housing associations have flexibility within SHPS to keep employees on defined benefits but ask them to pay more or change the benefits to which they are entitled and there is concern that employers will seek to transfer employees on to inferior defined contribution schemes.

 

Housing associations high margins and profitability

 

This website has reported on multiple sources that demonstrate the remarkable profitability and high margins across the housing association sector.  Savills Residential Research revealed the sector had increased its core margins from 32.3% to 34.5% saying the sector’s achievements were “seriously impressive”.   Associations have booked record surpluses year after year, along with positive indicators in all the main areas of finance while squeezing their employees. 

 

Last year employment costs were down by 6.6%, falling to £3.37 billion and this was despite special pension costs in the sector not expected to repeat in the short run according to Vantage Business Solutions.  The Vantage report also looks at a range of measure of financial viability.  For example, all the main EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) measures have improved significantly over the last year.

 

Unite members will not accept a knee jerk response that could lead to them facing poverty in old age. 

 

 

Paul Kershaw 19th October 2018

 

 

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