Phil Woolas written statement to Parliament on Local Government Pension Scheme

Minister for Local Government, Phil Woolas, set out in a written statement to Parliament the outcomes of recent constructive discussions with local authority employers and trades unions through the Tripartite Committee. This detailed the agreement that had been reached on how the cost of temporarily reinstating the 85 year rule in the Scheme should be met, and a timetable for taking forward discussions on future reform of the Local Government Pension Scheme.

The Government's objective for the Local Government Pension Scheme is to ensure its ongoing affordability, sustainability and acceptability to taxpayers and, at the same time to provide good quality, attractive and flexible pensions that provide fairly for its existing and future membership.

A central tenet of this is the removal of the 85 year rule from the scheme (whereby local government workers can retire early if their age and years of service total more than 85), to comply with age discrimination legislation coming into force from 1 October 2006. Consultation on amending regulations will follow shortly.

Local Government Minister Phil Woolas said: "Following constructive dialogue about the Local Government Pension
Scheme, and, with the agreement of all parties concerned, cost pressures  arising from the temporary reinstatement of the 85 year rule, can be met  through tax simplification measures contained in the Finance Act 2004.  This confirms our earlier reassurance that the cost pressures arising from this action would not fall on taxpayers, either locally or nationally."

"It is our clear intention to remove the 85 year rule from the Scheme from 1 October 2006, to comply with European age discrimination legislation. The rule of 85 discriminates not only on the grounds of age, but also against women, who are likely to start work for their local government employer later and on a part-time basis. Consultation on amending regulations will begin shortly."

"Discussions on further reform of the Scheme will begin shortly. A policy  discussion paper will be issued in June 2006, with a further following  consultation on draft regulations in the autumn. The regulations can then be in place for April 2007, with the new Scheme coming into force from April 2008. Both the unions and the employers have agreed this timetable."