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Landlords face strikes after predicted rise in pension contributions

October 6 2014

Social landlords could face strike action if they try to change staff pension arrangements after a review suggested an increased deficit could see contributions rise by three per cent.

The Social Housing Pension Scheme (SHPS), which has 550 social landlords as members, has carried out its three-year valuation of its deficit – the gap between its assets and liabilities – this week.

Despite the results not been announced until 2015, consultancy Hymans Robertson warned that its own financial analysis predicts a 30 per cent rise to £1.3bn, from £1bn in 2011.

To meet this shortfall, employer contributions would have to rise from 19.4 per cent of salaries to 22 per cent – a cost that would be likely to be passed on in part to employees.

Staff could also be transferred to less favourable defined contribution schemes.

John Gray, housing association branch secretary at union Unison, told Inside Housing: “We would absolutely, 100 per cent look to take action if this meant staff were moved to worse schemes.

“Employers have got to look after staff. The alternative is that more of their employees die in poverty.”

Mr Gary said the deficit was a result of making a calculation based on expected returns on government bonds, which are currently at a 200-year low because interest rates have been suppressed.

New accountancy rules, which take effect from 2015, also mean the £1.3bn deficit will have to be recognised on association balance sheets.

The Pensions Trust, which operates SHPS, declined to comment.

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