29 September 2006
Public sector union Unison has lost its application for a judicial review of the government's decision to increase the earliest retirement age in the Local Government Pension Scheme.
The union had sought to overturn the government's removal of the 'rule of 85' from the scheme, under which members whose age plus years in service reach 85 may retire on unreduced benefits at 60. The government claimed this breached European Union rules against age discrimination, while the union said it did not.
But in a judgment issued in the High Court in London on September 27, Judge Andrew Nicol dismissed Unison's claim, finding that the government's view of the EU law was effectively irrelevant, as it would have removed the rule anyway on grounds of cost.
The judge's verdict rested on a witness statement by Brian Town, head of pensions policy at the Department for Communities and Local Government. Town said: 'Even without [the] need to comply with the directive, the deputy prime minister would have removed the rule of 85 on policy grounds on the basis of proper management of local authority budgets.'
Town's evidence angered Unison as, throughout the course of the two-year dispute, the government had denied that its plan to remove the rule of 85 was a cost-saving exercise.
As late as last week, a DCLG spokesman told Public Finance: 'The crux of our reasoning for the removal of the 85-year rule is now and has always been that it represents age discrimination.'
Heather Wakefield, head of local government at Unison told PF: 'This is very frustrating, as both our own actuaries and eventually the government's actuaries have found that there is enough money in the LGPS pot to protect all existing members from the rule change. But the DCLG always ignored that argument, as they said they had to remove it because of discrimination.'
The judge went on to find that the DCLG was correct to view the rule of 85 as potentially discriminatory, but said it was not for the court to decide whether it could be 'justified' under EU exemption arrangements for pension schemes.
PFsep2006
