Unions: ‘Fairer alternative’ is foolhardy and reckless

In a very unusual move, the groups, covering a variety of areas, including healthcare and education, came out against part of an amendment from deputies Heidi Soulsby and Gavin St Pier.

The self-styled ‘fairer alternative’ amendment includes a proposal for a three-year employer contribution holiday for the defined benefit scheme part of the States of Guernsey Superannuation Fund until the end of 2026.

If follows the pension fund being valued in 2020 as being 107% funded.

The unions said they were extremely concerned by this part of the amendment to the Funding and Investment Plan.

‘If the employer rate was to drop to 0% for three years, this would repeat the disastrous decisions of the 2000s and destroy the sustainable foundation of the scheme,’ they wrote.

‘The result would be highly likely to swing the scheme from a small surplus to a significant deficit that the States would then have to rectify, either through vastly increased employer contributions, or through further reforms to pension benefits that would undoubtedly lead, as last time, to significant industrial unrest.’

In response to the unions’ letter, deputies Soulsby and St Pier, along with Deputy Sasha Kazantseva-Miller, said that any conversations around the States Superannuation Fund were sensitive. However, they should be had.

‘We believe that there has been an understandable but significant overreaction to this proposition,’ the deputies said.

They denied that their plans would lead to a deficit.

‘There is no basis to assert that this would materialise as a fact because the position of the fund in three years’ time will be a function of the performance of the fund’s assets linked to market conditions and total contributions,’ the deputies wrote.

‘Employee contributions to the fund as well as employer contributions to the defined contribution part of the fund will continue. Therefore the proposals would not have the deleterious impact that the unions are claiming.’

The States has already cut the employer contribution rate last year in response to a small surplus. The joint unions felt that move was premature, as the 2020 valuation pre-dated Covid, the Ukraine War and high inflation rates.

‘The fact that the proponents of this amendment are seeking to rely on an actuarial valuation that is now nearly three years out of date is concerning,’ they said.

‘The ethics of diverting monies that should be paid into a pension fund to finance capital and revenue projects is also highly questionable.’

The groups added that there were serious governance issues if the employer’s contribution rate was amended without consultation with unions through the Pensions Consultative Committee.

‘The joint unions, therefore, urge deputies to reject this foolhardy and reckless amendment, which is proposed without any modelling of the impact on the scheme, and which would cost the States and its employees dearly in future years.’

Policy & Resources declined to comment on the union’s letter.

The Funding & Investment Plan is due to be debated by the States next week.

Letter signatories

Frank Minal - Industrial Relations Officer, British Medical Association

Wayne Bates - National Negotiating Official, NASUWT – The Teachers’ Union

Elizabeth Salisbury - Regional Head, National Association of Headteachers

Helen Ball - Senior Regional Officer, National Education Union

Stephen Langford - Negotiations Executive, Prospect

Vicky Richards - National Officer, Royal College of Midwives

Jacqueline Carr - Senior Regional Officer, Royal College of Nursing

Dave Bourgaize - Regional Officer, Unite the Union