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REVIEW OF PUBLIC SECTOR PENSIONS 2009

REVIEW OF PUBLIC SECTOR PENSIONS 2009. STARTING POINTS. Government’s 4 Principles. SIMPLICITY AFFORDABILITY GOVERNANCE TOTAL REMUNERATION. 3 STRANDS OF DEVELOPMENT. SUPERANNUATION ACT 1984 Breaks link with UK GOVERNANCE ARRANGEMENTS 2009 – we must apply UK Governance

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REVIEW OF PUBLIC SECTOR PENSIONS 2009

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  1. REVIEW OF PUBLIC SECTOR PENSIONS 2009

  2. STARTING POINTS

  3. Government’s 4 Principles • SIMPLICITY • AFFORDABILITY • GOVERNANCE • TOTAL REMUNERATION

  4. 3 STRANDS OF DEVELOPMENT • SUPERANNUATION ACT 1984 • Breaks link with UK • GOVERNANCE ARRANGEMENTS • 2009 – we must apply UK Governance • PUBLIC SECTOR REVIEW OF PENSIONS • 4 principles/unified pension scheme

  5. How does the current review approach the issues?

  6. Benefits of current approach? • Revolutionary? • Achieves Government Aims? • Immediate? • Simple?

  7. Disadvantages? • Too quick? • Industrial Relations Issues? • Untried/tested? • On island expertise? • Sustainable/affordable?

  8. How are we proposing to change that approach?

  9. Benefits of our approach? • Evolutionary? • Achieves Govt aims? • Protects our members & the public purse? • Resolves major IR issues? • Flexible/pick n mix? • Additional rationale for change?

  10. Disadvantages? • Cash flow in short term? • NHS? • Slower/more conservative change? • Still needs expertise? • More complex than current proposals?

  11. Superannuation Act 1984 • Change not just around breaking UK link • But it has become about that • Members and politicians want decision making on major change to remain primarily with Tynwald • Breaking the link with the UK • Problems/Transfer Club

  12. Governance • Change - determined by valuations/viability of the scheme • Governance groups agree change on an ongoing basis • Groups - 10 people - equal employer/employee representation • UK schemes are run or are moving towards being run on this basis • Over 99% of Prospect members voted in favour of Governance groups • Why? Fair and self sustaining

  13. Governance - if we follow the UK 10 groups 3 sections Too many groups Leisure Services has 1 member Differing valuations Different from UK Same scheme – Different % rates Different outcomes We break the link with theUK

  14. Governance – if we follow the UK • PCSPS – 3 sections • 10 schemes • 10 valuations • 10 Governance groups = 100 people • Valuations will differ/differ from the UK • So change will be different from the UK • Inbuilt and irreconcilable factor

  15. Governance • THE BREAK WITH THE UK MUST HAPPEN REGARDLESS OF ALL OTHER DEVELOPMENTS • THE LINK WITH THE UK MAKES THIS PARADOXICALLY • AN ABSOLUTE REQUIREMENT

  16. But we can then modify to… These groups could be one group?

  17. Manx Governance • Retain the schemes • Close them to new entrants • Change the SA 1984 • Adopt Governance - a modified UK model • 1 or 2 Governance groups max • Apply to other schemes e.g. NHS/Teachers • A new scheme…..

  18. Public Sector review • Based on the outcome of the current review • Permanently open to anyone who wishes to join • Movement may be generated by numerous factors • E.g. NUVOS members – this scheme worse than that currently proposed • Governance group for new scheme

  19. Pensions Office/Board

  20. Pensions Office/Board • An independent body to oversee and liaise on • Pensions strategic development & management • Administration and operational delivery • Strategic workings of the different interest groups i.e. Governance groups, Tynwald, employer groups etc. • UK resources/development/expertise

  21. Copying the Principle Apply the approach to other schemes e.g NHS/Teachers Take account of specific issues e.g. recruitment/retention/transfer club We are moving towards uniform schemes e.g. Teachers becoming like PCSPS

  22. Conclusions • Evolved & consensus approach • Voluntary and staggered approach • Integrated approach • Pick n mix approach • choose the best • exclude the worst • draw on UK expertise/experience

  23. Conclusions SIMPLICITY less schemes, long term – ONE AFFORDABILITY self sustaining GOVERNANCE robust, partnership approach TOTAL REMUNERATION flexible enough to meet the needs of differing groups

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