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Cath Everett

Sift Media

Freelance journalist and former editor of HRZone

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Fresh pension proposals to hit millions of workers in their 40s

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Millions of workers in their 40s are expected to be hit by coalition government plans to bring forward increases in the state pension age to 67 by a decade.

The news came as an employment tribunal found that a leisure centre worker suffered age discrimination and was unfairly dismissed so that his employer could avoid paying pension costs after he turned 50.
 
Although ministers have as yet made no firm decisions on whether to up the state pension age to 67 by 2026 rather than the previously decreed 2036, such a move would mean that an estimated eight million people in their 40s would have to work for another year before receiving state benefits.
 
The Pensions Bill, which will raise the age at which both men and women can claim the pension from 65 to 66 by 2020, is currently being pushed through Parliament.
 
But Work and Pensions Secretary Iain Duncan Smith said the timetable for raising the retirement was currently “too slow” and that more drastic action was required to avert a pension crisis as life expectancy continued to increase.
 
Ministers are also considering whether to introduce a mechanism that would see the state pension age increase automatically in line with life expectancy.
 
But they are also promising to come up with a transitional arrangement for the 330,000 women who face having to wait two years longer for their pension. The female pension age is being aligned with men’s in 2018 ahead of the rise to 66 for both sexes.
 
More than 160 MPs have signed a motion calling for a rethink for those women hit hardest by the move, although any change is likely to be relatively minor.
 
Age discrimination
 
Elsewhere, an employment tribunal in Bristol upheld that Christopher Walsh, now 51, had been unfairly dismissed by Tewkesbury Borough Council in September 2009 because it did not want to pay his pension costs.
 
Walsh was put at risk of redundancy the same month following a management restructure and the decision to transfer five leisure centres out of local authority control.
 
Although a colleague was appointed to take the lead in enabling the transfer, Walsh provided support due to his expertise in the area. It was also suggested at the time that he be retained until the transitional period was complete.
 
In a subsequent meeting between the Council’s interim chief executive and an HR consultant who was looking after the management restructure, however, the latter was asked to consider whether there was a requirement for Walsh’s contract to be extended.
 
Instead the HR consultant requested that the value of Walsh’s pension be calculated and Walsh was later told that he would not be kept on as costs would amount to £90,000 when he turned 50 in December 2009.
 
The Council denied that Walsh’s pension had been a relevant factor in its decision not to retain him during the transitional period or that it had subjected him to age discrimination, but the employment tribunal rejected both defences. Walsh is seeking more than £250,000 in compensation.
 
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Cath Everett

Freelance journalist and former editor of HRZone

Read more from Cath Everett
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