PENSION CHANGES BETTER SOONER THAN LATER FOR ALL

With both central and local government accepting that the pension scheme is not sustainable in its present form, changes should come sooner rather than later, local government employers said.

The Local Government Association was commenting both in the wake of the government's recent proposal to revoke the changes to the rules surrounding early retirement, which came into effect this month, and in response to the longer-term changes proposed to take effect from 2008.

LGA chairman Sandy Bruce Lockhart said: 'We have had positive talks with John Prescott to discuss both current and future proposals for the revision of the Local Government Pension Scheme.

'All the LGA party group leaders and I stressed that the increased costs caused by the government's recent proposal to retrospectively revoke changes, that came into effect on April 1st should not fall on local councils and their taxpayers. We have suggested that the discussions which are envisaged should be based on actuarial advice which is acceptable and agreed as objective by all.

'We are committed to ensuring the pension scheme meets the long-term needs of employees, councils and council tax payers and this is the spirit behind our talks with government and the unions and our detailed submission on the proposed 2008 changes. We have asked the deputy prime minister to view the planned revisions to the scheme as a whole - and therefore to consider bringing forward his proposals to 2006. This will be a priority for whoever forms the next government,' he said.

'However, it is for the deputy prime minister as regulator of the pension scheme to bring in the necessary changes.'

Local government employers argue in the submission, that if a new tripartite machinery was put on a statutory footing, the pension scheme could become part of the national bargaining process in local government, allowing a cohesive look at the benefits paid to staff at all levels. This would also be an effective way of allowing the unions to represent all their members, including the lower paid, and ensure that their benefits package overall, including pay and pensions, came out of a negotiated settlement that met the needs both of employees and employers.

The submission, derived after extensive consultation, pulls together in some detail the long-held views of the employers that the welcome increased costs from pensioners benefiting from longer retirements, should not fall exclusively on the council and council tax payers. It also raises issues around the balance between state and individual, and the fact that the benefits from the local government scheme, depend on the wider implications for individuals of the state insurance and benefits system.

* LGA consultation document