Agenda item

This report reviews the Council’s current arrangements for early retirement and redundancy, in the light of changes to the LGPS and the introduction of age discrimination legislation, and invites the Executive to make recommendations to Council on consequent changes to the Council’s early retirement and redundancy policy.

Members considered a report which reviewed the Council’s current arrangements for early retirement and redundancy, in the light of changes to the LGPS and the introduction of age discrimination legislation, and proposed amendments to these policies as a result.  The Executive were asked to consider whether to recommend the proposals to full Council for approval.

Details of the Council’s current policies were set out in paragraphs 5-11 of the report. Changes to the LGPS arising from government legislation effective from 1 April 2006 were discussed in paragraph 12, while further changes proposed from 1 April 2008 and contained in draft legislation were outlined in paragraphs 13-15.  The report then set out Officers’ recommendations for changes to Council policy.  These included the following, in respect of which alternative options were presented but not recommended:

1. Replacement Policy for Redundancy Pay:

Option A – award all employees an additional number of weeks redundancy pay (subject to the 30 week maximum).  Not recommended, due to the strain it would put upon the early retirement and redundancy budget.

Option B – calculate redundancy pay using the statutory tables, with a 30 week maximum.  Recommended.

2. Early Retirement under the “85 year” rule:

Option A – allow all employees the option to elect to retire early and receive actuarially reduced pension benefits.  Not recommended due to costs and potential disruption to service areas / increased staff turnover.

Option B – adopt a range of formal criteria under which to consider requests for early retirement.  Not recommended, due to problems in achieving objectivity and risk of challenge and subsequent costs when requests refused.

Option C – remove the option to retire at age 58 (now deemed discriminatory) and align the early retirement policy with the provisions of the NYPF and the TPS, enabling members of the North Yorkshire Pension Fund (NYPF) to elect to retire from age 60.  Recommended.

3. Transitional Arrangements (should Option C under 2. above be approved):

Option A – remove the current policy with effect from 1 March 2007.

Option B – allow early retirements up to 31 August 2007.

Option C(i) – allow all employees aged 57 at 31 August 2006 to elect to retire early if they reach the 85 year rule by 31 August 2009.

Option C(ii) – allow all employees aged 57 at 31 August 2006 to elect to retire early if they reach the 85 year rule by 31 August 2008.

Option C(iii)  - allow all employees aged 57 at 31 December 2006 to elect to retire early if they reach the 85 year rule by 31 August 2009.  Recommended, as the fairest option both for those employees who currently qualified to leave and for those approaching qualification.

Further recommendations, on the policy to be adopted in respect of ill-health retirements, flexible retirement and added years / augmentation, were set out in paragraphs 26 to 33 of the report. 

Officers provided an update on the position of UNISON, who had not yet formally responded but had suggested that there should be a longer transition period for removal of the 85 year rule.  They had been advised that this might be more likely to breach age discrimination legislation.  In response to the comments of the Shadow Executive on this item, Officers confirmed that the Council would continue to provide support and advice to staff facing redundancy and that Corporate Management Team was fully in favour of a flexible retirement policy but would require further advice from Government or other council schemes before this could be taken any further.