Unions reject new pension plan

Strike threat forced government delay in March

Unions have rejected the government's latest proposals for a shake-up of local authority pension schemes.

Unions said the new plan, which involves increased staff contributions, were worse than those that almost led to a national strike in March.

Earlier this year the government had suggested raising the standard age of retirement for the scheme to 65.

The suggested changes are part of a move to deal with the growing pension costs of public sector workers.

Six trade unions - Unison, Napo, T&G, GMB, Amicus and Ucatt - rejected the proposals put forward by the government during talks with local authority representatives and the Office of the Deputy Prime Minister (ODPM) on Thursday.

'Outright rejection'

A spokesman for the unions said the latest version of the employers' plan now involved a rise in staff contributions - possibly from 6% to 7%.

UNIONS IN PENSION ROW Unison - represents public service workers T&G - transport and general workers Amicus - manufacturing, technical and skilled staff GMB - general union Napo - family court and probation employees Ucatt - construction workers

"The employers' proposals were flatly rejected - outright," the spokesman said.

Despite the setback, the government pledged to continue to find "an acceptable and workable way forward" to reform the pension scheme.

"These discussions do not preclude discussions about the longer term modernisation of the local government pension scheme, begun in October 2004 and proposed for implementation in 2008," a spokesman from the ODPM said.

Plans for change

The government wants to reduce the cost of these schemes by making people work longer before they retire, and first tabled changes to the scheme last year.

The measures involved raising the standard retirement age to 65, basing the pension on career average earnings rather than final salary, and scrapping the so-called "rule of 85".

This rule allows council staff to retire early with no penalty if their combined age and years in the pension scheme add up to 85 - for some this can mean retirement on a full pension at 60.

However, the proposals sparked outrage and 1.5 million civil servants and local authority staff threatened to stage a national strike in March - which prompted the government to back down from the planned changes.