03 March 2006
The Local Government Association and unions have failed to reach an agreement over the benefit protection of existing members of the local government pension scheme, bringing the likelihood of strike action closer.
Although unions have conceded that a rule allowing long-serving members to retire before the age of 65 should be phased out, they continue to demand lifetime protection for existing members.
Consultation on a draft parliamentary order scrapping the rule for new members on October 1, 2006 and for existing members by April 1, 2013 ended
on February 28.
Speaking on that date, LGA chair Sir Sandy Bruce-Lockhart said that union proposals to extend protection to all existing scheme members would cost 'more than £6bn' over 15 years.
'The council tax payer simply cannot pay more,' he said. 'People are living longer and unless action is taken now, the cost to individual council tax payers and local government will continue to rise.'
The unions have rejected the LGA's figures, saying they are based on overly 'conservative' actuarial assumptions.
Bryn Davis, actuary for Unison, told Public Finance that the scheme would generate up to £5.9bn over 15 years through the introduction of new lump sum arrangements. That would more than cover the £5bn that unions estimate lifetime protection would cost, he said.
As neither side can agree, a decision is likely to be made by John Prescott, the deputy prime minister. But an ODPM source told PF that the department was 'not happy' with Bruce-Lockhart's comments. 'The LGA should be engaging with the unions in a constructive dialogue,' the source said.
Meanwhile, the Fire Brigades Union is celebrating what it calls a 'momentous decision' from the House of Lords to give part-time firefighters on 'retained duty' equal access to the main firefighters' pension scheme.
On February 16 the government dropped proposals to change the earliest retirement age for existing members of the FPS from 50 to 55.
PFmar2006
