The exit payment cap in local government - it gets worse

The long-awaited exit payment cap is now upon us, undoing the automatic right of local government workers made redundant above the age of 55 to an unreduced pension. Under cover of a hue and cry about large pay-offs to senior officers, the Government is implementing an attack upon the redundancy rights of very many local government workers).

 

By taking into account the "pension strain" cost of permitting unreduced pensions on early retirement by reason of redundancy, although this cost is not a payment to the employee, the exit payment cap impacts upon workers who are certainly not "fat cats".

 

I blogged for the first time about this attack here more than five years ago – the Tory Government ignored critical comments in consultation and introduced the Enterprise Bill into the House of Lords, where former UNISON President Rita Donaghy led the opposition in a failed attempt to prevent the law coming into force.

 

Having passed the primary legislation in 2015 the Government then intended to introduce regulations by 1 October 2016 and embarked upon further consultation on the detail. A significant number of senior local government employees over the age of 55 jumped to take redundancy in the summer and early autumn of that year, hoping to avoid the anticipated imposition of the cap.

 

Following the Referendum, the resignation of a Prime Minister, the 2017 General Election and – eventually, after another round of consultation starting last year – the resignation of another Prime Minister and the 2019 General Election, it was only this year that the Tories resurrected these proposals, as I observed back in February.

 

Now, the Regulations have been introduced – and will come into force on 4 November (although the deadline for the associated consultation on necessary related changes to the Local Government Pension Scheme Regulations is not until 9 November – creating what the Local Government Pension Scheme Advisory Board describe as a "predicament" for local government employers and LGPS administering authorities).

 

Last year's UNISON local government Conference committed the Union to campaign against the renewed threat of the exit payment cap – a commitment made more important by the detail of the proposals now being consulted upon, which – for local government workers – go further than the exit payment cap itself since statutory redundancy pay and any additional severance payment will be offset against the strain cost even if the strain payment and additional severance payment in total would be well under the £95,000 cap.

 

Those of us who retired ahead of this attack have – at least – a moral obligation to support the fight back against this latest attack upon public sector pensions.