UK - Public sector scheme members and MPs will get "favourable treatment" under the Finance Bill, lawyers claim.
The new rules, which will lift the early retirement age to 55, will not apply to public sector workers provided another age limit is written into scheme rules before April 2006.
Members of other occupational scheme will only retain their right to an earlier retirement if their scheme rules allowed it before December 10, 2003.
Similarly, under an “enhanced protection” provision, statutory scheme members can protect benefits that they would not have otherwise been entitled to under the old pensions regime – even allowing them to escape the £1.5m lifetime limit.
Linklaters consultant Richard Kandler said the provisions were blatantly more generous for MPs and civil servants.
He said: “There is no obvious justification for placing MPs and civil servants in a stronger position than other people, particularly when it is already widely felt they have historically had better pensions than those in the private sector.”
He said allowing MPs to escape the new minimum retirement age of 55, which is to be implemented in 2010, by giving them longer to adapt scheme rules was “harsh” on the private sector.
And he said it was hard to see why they were not subject to enhanced protection.
“They may receive a pension, with all the usual tax advantages, which is free of the recovery charge and is also free of the current earnings cap that has applied to them until now.”
Wragge & Co partner Jason Coates (pictured) agreed and claimed it smacked of the government “looking after its own”.
He said: “It seems there are quite a few areas where there is blatant favouritism and the government needs to clarify why.”
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