UK - Taxpayers will have to foot a £6bn bill over the next 15 years if the "85 year rule" regarding pensionable income is not abolished, the Local Government Authority (LGA) has claimed.
The rule, which allows a public pension scheme member to retire at 60 on a full pension if their age and length of service totals 85, is at the heart of an ongoing dispute between government and nine unions, who want the rule kept in place.
The unions have claimed certain civil servants are allowed to retire at 60 on full pensions, whereas they would have to retire at 65 if the rule was abolished.
But LGA spokesperson Richard Stokoe disagreed: “Those civil servants [who retire at 60] belong to a contributory pension scheme, while theirs’ is a centrally funded scheme,” he said. “That is a big difference, and we have a 27bn deficit. We have to close that gap, the actuaries have said this.”
LGA chairman Sir Sandy Bruce Lockhart said the 85 year rule would cost around £450m per year, equating to £6bn over the next 15 years.
The council taxpayer simply cannot pay more,” he said. The council tax payer currently pays more than double that of the staff members in contributions into the pension scheme and this has to be addressed.
“The changes to local government staff pensions are both needed and necessary.”
Lockhart called for a modern scheme that was “affordable, viable and fit for the 21st century”.
With the consultation period into reforms to the Local government pension scheme ending today, Stokoe said the LGA made the announcement as part of its submission over that issue.
“We need to see the 85 year rule gone in order to make the scheme affordable in the long term. There is no point in making a small correction now, only to have to come back to it in five years time and do it all over again. Let’s just get it done now.”
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