FORMER council staff working for a housing association will be removed from the ‘gold standard’ local government pension scheme.
Housing association Bron Afon said funding the scheme has caused it financial uncertainty and it could have had to make redundancies in future and operating one scheme is fairer to all its 370 employees.
But it was accused of using “fire and rehire” threats to push through the changes which a number of councillors said they would only “reluctantly” agree to.
Bron Afon purchased Torfaen Borough Council’s housing stock, in 2008, in a deal that required continued membership of the Local Government Pension Scheme for council staff who transferred across.
However Bron Afon asked Torfaen Borough Council to release it from that obligation and said the changes have been agreed through collective bargaining with its trade unions.
Bron Afon Chief executive Alan Brunt told Torfaen’s full council meeting the local government pension is “the gold standard” but said the business couldn’t be certain it could continue to fund the scheme, which a report said, has cost it around £2m a year over the past 10 years.
“We are concerned in future we won’t be able to continue to support (the local government scheme) and would face some unpalatable decisions at that point,” said Mr Brunt.
Instead staff will transfer to the Social Housing Pension Scheme, a defined contribution scheme rather than defined benefit scheme, Bron Afon has operated since it closed the local government scheme to new entrants in 2008. The local government pension costs Bron Afon more than double the new scheme.
It also said some staff have opted out of its pension scheme on cost grounds but its new plan will mean it can make a 12 per cent, of salary, employers contribution for at least 30 years and provide all staff the opportunity to save for “a comfortable retirement in line with the Living Pension standards”.
Labour Councillor Nathan Yeowell, who chairs the pension fund, said he hadn’t been involved in the talks but had discussed them with council officers and criticised Bron Afon’s report as failing to present information it would have liked included.
He said its decision to close the scheme to new members had pushed its costs up but said he would support removing the pension clause as the changes have been supported by the Bron Afon workforce.
Cllr Karl Gauden, who works for Unison which represents Bron Afon staff, said Bron Afon had been “intransigent” and threatened to use fire and rehire tactics “the most pernicious and reprehensible tactics an employer can use”.
Labour cabinet member David Daniels said he would “very, very reluctantly” support the proposal and said: “I would not be happy with this scheme myself.”
Independent member for Abersychan Giles Davies urged councillors to vote against it. He said: “Everybody’s got faces like turkeys voting for Christmas. If you feel that strongly against something just say you’re not happy. As councillors we can make a stand for our former staff.”
Lynsey Harris, Bron Afon’s finance chief, said it had issued the paperwork for potential redundancies early in the process on legal advice rather than “looking like an ambush”.
The recommendation to release Bron Afon from the pension clause was passed with 24 votes in favour and nine against. Five Labour members, Stuart Ashley, Lynda Clarkson, Steve Evans, Norma Parish and Jayne Watkins all stated they “agreed reluctantly” when they voted.
Cllr Gauden and Labour’s Caroline Price, who is a branch secretary with the Unite Union, were among four councillors who abstained.