18th November 2011
Chairman of the Civil Service Commission supports proposed public sector pension reform
THE new Chairman of the Civil Service Commission, Alfred Cannan MHK, has confirmed his support for the Isle of Man Government’s proposed pension reform.
Mr Cannan said the introduction of the Government Unified Scheme (GUS) would provide Island Civil Servants with greater pension certainty and security going forward.
He described GUS as ‘demonstrably better’ than the deal on offer to many public servants in the UK, and said he looked forward to working with local staff representatives to progress its implementation.
Tynwald has approved plans to reform 15 public service schemes into a single final salary scheme in order to bring pension arrangements under local control and make them simpler and more affordable. The unified scheme is set to take effect from April 1, 2012.
Mr Cannan commented:
‘In comparison with the pension reform proposals coming from the UK, GUS provides our civil servants with both greater pension certainty and security in the future. Civil servants and related groups will be able to choose to protect both the current final salary basis of their pension and the age at which they retire. By contrast, the UK is proposing to ask members to work longer and to introduce a Career Average type of scheme going forward. This is likely to leave many in a worse-off position in the UK. The Isle of Man solution provides a demonstrably better deal for the Island’s civil servants.’
Mr Cannan said he recognised that civil servants will have to pay an increased level of contributions in order to maintain their pension levels.
‘Whilst I fully appreciate that asking people to pay more in this economic climate is difficult, I welcome last week’s announcement from the Chief Minister to assist the lower-paid,’ he said.
‘This support is comparable with the assistance suggested as part of UK reforms.’
Mr Cannan also noted that the transition of contributions to the higher protected level of benefits for Island civil servants would be achieved by increases of no more than 1% of pay per year.
‘Compared with the proposed increases in the UK, which will see some workers paying an immediate increase of up to 2.4% of pay, our solution is a much fairer deal for members.’
The unified scheme also introduces improvements to members’ death-in-service benefits and the lump sum option on retirement.
‘Civil servants should welcome these additional benefits of rationalising and simplifying the scheme,’
Mr Cannan said, adding:
‘Such changes are not being introduced in the UK and therefore serve to emphasise how much more consideration has been given to improving the choices and options to our members where possible within the overall GUS costings.’
Mr Cannan concluded:
‘There is plenty to recommend the introduction of GUS, particularly in comparison with the proposed UK pension reform. Although GUS requires scheme members generally to pay more, it will provide more choice and enable civil and public servants in the Island to maintain a comparable level of benefits in the future at the same retirement age. I look forward to progressing the implementation of GUS with the Civil Service staff representatives.’