The threat of strike action among public sector workers has been averted after union members voted - narrowly in some cases - to accept big reforms to their pensions.
Tynwald next week will be asked to approve significant changes to the government’s Unified Pension Scheme, which will see public servants pay more and receive less.
It will mean all future benefits will be reduced by 6 per cent from April this year.
And new members will pay 2.5 per cent more in contributions from April this year while current members will see that 2.5 per cent increase phased in over three years from April next year.
The aim is to put public sector pensions onto a more sustainable footing in the future by providing a ’cost envelope’. There are also plans for cost sharing so that three quarters of any future costs increases are borne by the members.
But this will do nothing to tackle the so-called ’legacy’ funding gap relating to pension payments to public sector workers who have already retired and which is expected to spiral from £44.9m this year to £96.4m in 2034-35.
Unions were balloted on the proposals between January 23 and noon on Monday this week.
Unite members voted in favour by 82.4 per cent, with 17.6 per cent voting against (364 votes to 64, with one spoilt paper).
Members of Prospect, the biggest civil service union, voted in favour of the reforms by 949 votes to 700 with just two spoiled papers.
Its Government Officers’ Association members voted to approve the reforms by 689 to 465, with a turn-out of 70 per cent.
Angela Moffatt, Prospect negotiating officer, had previously warned that a vote to reject the reforms could lead to a ballot for industrial action.
But in some groups the ’yes’ result was by the slimmest of margins.
Prospect’s prison officers members voted in favour by 27 votes to 26, with a turn-out of 60 per cent. There was one spoilt paper.
And its Whitley Council manual workers voted in favour of the reforms by 148 votes to 146, with a 71 per cent turn-out.
Social care staff on National Joint Council terms and conditions narrowly voted yes by 28 votes to 26 on a turn-out of 78 per cent and health workers on Manx pay terms and conditions voted by 29 to 27, with a similarly large turn-out of 75 per cent.
In a message to its members, Prospect said: ’As you can see, in some employment groups, the proposals have been accepted by the narrowest of margins on a high turn-out overall.
’We will reflect this in our lobbying actions which will take place from now until the Tynwald debate.’
Civil servants who paid contributions of just 1.5 per cent five years ago have seen phased increases since 2012 that will take the rate to 7.75 per cent in 2018. A further 2.5 per cent on top will see them pay 10.25 per cent by 2021. Some grades will pay more still - 10.25 per cent - while firefighters will pay 13.5 per cent.
For new members, the increase in contributions will take the rate they pay to 7.5 per cent - lower than active members as they have not accrued benefits under the old system.
The 2.5 per cent increase in contributions will not apply to Tynwald members who have been already paying 5 per cent more towards their pensions from October last year.
In a briefing to Tynwald members, the Public Sector Pensions Authority said the changes were simple to implement and would deliver the required savings immediately, while not leading to any mass exodus of members from the scheme.
The public sector pension liability has risen from £2.1bn in 2013 to £3bn.
The PSPA and Treasury are still considering options to tackle the legacy funding gap. Proposals are expected to go to Tynwald in October and will follow an actuarial review of all the public sector pensions schemes.
Discussions are continuing on changes to pensions for the police, teachers and judges.
Policy and Reform Minister Chris Thomas, who is vice chairman of the PSPA, said he was pleased that the unions had engaged with the reform process and so much progress had been made.
But he added: ’The most important vote is the one in Tynwald.’