LONDON: Talks to resolve the deadlock over pension for two million local authority workers in Britain ended without an agreement on Monday. Deputy prime minister John Prescott met employers and union representatives, but there was no deal at the end of the talks.
The employers are seeking an end to the current system, which allows some workers to retire at 60 years because they contend the practice will violate the new age discrimination law. The unions are opposing this move and they have threatened to go on strike if the pension age is raised to 65 years.
While the local government pension scheme has a theoretical retirement age of 65, rule 85 allows members to choose retirement at 60, with no penalty for doing so, if their age plus years of membership in the pension scheme adds up to 85. Thus a council worker who is 60, with 25 years of pension contributions, can retire without his or her accumulated pension being reduced. The provision makes the scheme unique as normal pension schemes penalise staff who retire early because they are paying in for fewer years than planned.
The employers want the rule 85 to be scrapped, but the unions want workers in their 50s to be protected if the pension age is standardised. They also cite last month's agreement involving public sector workers, which provides for workers joining the services from next year to retire at 65 but they can opt for an earlier age if they make extra contributions to their pension plans.
The Local Government Association, which represents council chiefs, argues that the current system is not 'economically viable'.
The office of the deputy prime minister later described the talks as helpful and constructive and hoped that the two sides would come together quickly to reach an agreement.
Officials from the Local Government Association too claimed that both sides were "slowly moving forward".
Posted
on : Tue, 22 Nov 2005 13:10 GMT | Pensions News
By : Pippa Fielding
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