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PENSION REFORMS RILE UNIONS

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By Chris Gray ...
By Chris Gray

Local government unions and employers are in conflict over plans to cut the cost of the council pension scheme.

The three unions - Unison, the GMB and the T&G - have demanded a meeting with ministers after the Employers' Organisation voiced its backing for the reforms.

The Office of the Deputy Prime Minister wants to raise the minimum qualifying age for a pension from 50 to 55, and to abolish the '85-year rule', which allows staff to retire on full pension if their age plus service years adds up to at least 85.

The changes would be introduced in March 2005, but would not affect any benefits accrued before that date.

Unison head of local government Heather Wakefield said ministers had underestimated opposition to the plans, and were failing to address issues like the low take-up of the scheme among part-time workers and rights of same-sex partners.

She said the pension scheme was a key benefit of working in local government, adding: 'For the government to be trying to whittle away the pension entitlement sends a very negative message to the workforce.'

Roy Wilson, chair of the EO's local government pensions committee, said it was supporting the ODPM's plans because the final salary scheme had to be regulated in an affordable way.

'A fair balance needs to be struck between the benefits that are protected to scheme members and the costs that are incurred by the employers and local tax-payers,' he said.

Pensions expert Tim Rothwell, of Tribal Resourcing, said the protection offered to existing rights in the proposed reforms was 'generous'.

He said some of the opposition was the result of fears that there might be changes to the contribution levels or the scheme's final salary status in the future.

Mr Rothwell added: 'There are not that many losers in the plans as they stand. The impact on individuals is not that stark.'

Retiring type: what the Pension changes would mean for you

-- From 31 March 2005, retirement age would rise from 60 to 65 and the minimum age to qualify for benefits would rise from 50 to 55.

-- The 85-year rule', that allows members retiring early to receive full benefits if their age plus years of service equals at least 85, would be abolished.

-- Changes would not affect benefits earned before 31 March 2005, but any accrued after that date would be paid at a reduced rate if they were taken before 65.

-- The impact would be greatest on staff who retire before 65 and meet the 85-year rule.

-- Transitional arrangements would be included to help

staff near to retirement. Anyone who met the 85-year rule and turned 60 before 1 April 2013 would not be affected by the changes.

-- Members aged 50 or over on 31 March 2005 would not be affected by the rise in the minimum qualification age.

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