Meeting documents

Cabinet
Tuesday, 16 January 2007

CA160107-15

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ITEM CA15

CABINET – 16 JANUARY 2007

RETIREMENT POLICY

Report by Head of Human Resources & Organisational Development

and Director for Children, Young People & Families

Introduction

  1. The Cabinet approved a limited number of changes to the Council’s policies on redundancy compensation and premature retirement for teachers in October 2006 following the implementation of the Employment Equality (Age) Regulations 2006.

  2. Officers were asked to undertake a review of the Retirement Policy for Green Book employees, Teachers’ Retirement Policy and Premature Retirement Scheme and Redundancy Procedures in consultation with the Cabinet Members for Change Management and Schools Improvement and to report back following consultations with relevant trades unions. The results of this are included in this report.

  3. Since the report in October 2006 the Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations 2006 have been published and these have been taken into account in the revisions proposed.

    4. Which Policies and Procedures are Affected?

  4. The following revised documents are appended:

    • Retirement Policy for Green Book Employees. See Annex 1 (download as .doc file). This sets out the Council’s policy for the retirement of employees under ‘Green Book’ conditions of service who are eligible to join the Local Government Pension Scheme (LGPS).

    • Teachers’ Retirement Policy and Premature Retirement Compensation Scheme. See Annex 2 (download as .doc file). This sets out the Council’s policy on retirement and compensation for early retirement among teachers who are eligible to join the Teachers Pension Scheme (TPS).

    • Redundancy Procedure. See Annex 3 (download as .doc file). This sets out the steps the Council will follow in managing redundancy for Green Book non-school employees. Consultations on the Redundancy Procedure for school based employees and centrally employed teachers are continuing and a further report on this will come to the Cabinet in February 2007.

  1. As a principle, harmonisation of the policies has been applied across the different work groups wherever possible, taking into consideration the different regulations and terms and conditions involved. However, in some cases significant differences cannot be avoided due to these constraints.

  2. Copies of the current policies and procedures are available on request from County Human Resources.

  3. It is proposed that existing policies and procedures will apply to cases where estimates of benefits have already been given and the termination of employment date is on or before 31 March 2007.

    4. Proposed Changes to Policies and Procedures

  4. The key changes to the policies on Retirement for Green Book Employees and Teachers’ Retirement Policy and Premature Retirement Compensation Scheme are:

    1. Removal of retirement on the grounds of efficiency of the service other than in special cases where they form part of a compromise agreement or for cases as in b) below.

    2. The possibility of early retirement for employees with certified chronic health problems which will affect their efficiency for the foreseeable future but where early retirement cannot be granted in accordance with the relevant pension regulations. (This option was previously open to teachers but not LGPS members.) This change will need to be reviewed if the LGPS Regulations relating to ill health retirement are altered, as current consultations indicate could take place in 2008.

    3. The inclusion of an explicit statement that requests for early payment of benefits will not normally be granted except where there is no additional cost to the Council. This includes requests on the grounds of compassion and from current and former employees with deferred benefits, other than in cases of permanent ill health.

    4. The incorporation of the Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations 2006 which includes the new redundancy compensation agreement and the removal of the payment of added years to retirers.

    5. Reference to the Age Legislation October 2006.

  5. The key changes to the Redundancy Procedure for Green Book Non-School Employees relate to the criteria for the selection of redundant employees. These have been strengthened to put the emphasis on objective, evidence-based reasons such as skills, qualifications, experience, standard of work performance, attendance or disciplinary record. This aims to avoid selection based primarily on length of service and to introduce elements which impact on service delivery into the selection process.

    6.   Results of Consultations

  6. Consultations have taken place with relevant trades unions and the following encapsulates the views expressed.

    7. Teachers Unions. Teachers’ unions have accepted the proposed changes to the Teachers’ Retirement Policy and Premature Retirement Compensation Scheme. However, consultations are continuing regarding the Redundancy Procedure for School-Based Employees and centrally employed teachers. Teachers’ unions have expressed concerns on two main issues: a) the proposal to move away from using length of service as the primary criterion for selection for redundancy and b) the proposal to introduce the statement that the County Council reserves the right to refuse to fund redundancy compensation in cases where the costs to the Council significantly out-weigh the saving to the school. Initial discussions with head teachers’ representatives indicate that they wish to keep the method of selection for redundancy simple, such as length of service, as they wish to avoid introducing contentious elements into the model policy to be adopted by governors. A further report on these consultations and proposals regarding the Redundancy Procedure for School-Based Employees will come to the Cabinet in February 2007.

    Unison. Unison expressed its strong wish to continue to have the option of early retirement on the grounds of efficiency of the service in exceptional cases and this facility has been incorporated into the Retirement Policy. Unison is content with this response and accept the proposed revised policy. The Employees Joint Consultative Committee expressed concerns regarding the proposal to move away from using length of service as the primary criterion for selection for redundancy and indicated that they feared that this could lead to conflict and increased referrals to Employment Tribunals. The draft procedure has been amended in response to this and now incorporates the requirement to consult Unison with a view to agreement regarding selection criteria and to refer any outstanding disagreements to County Human Resources Manager. With these amendments the procedure has been accepted.

    Financial and Staff Implications

  7. In schools during the academic year September 2005 to August 2006 there were 27 efficiency retirements among teachers and two efficiency retirements among non-teachers. This cost the Council approximately £42,000 in ongoing pension payments, together with £36,700 in lump sum payments for teachers and £22,000 in capitalised costs for non-teachers. In the rest of the Council in 2005/6 there was one efficiency retirement and one compassionate retirement among LGPS members with a capitalised cost to the Council of approximately £89,000. So far in 2006/7 there have been four efficiency retirements and one compassionate retirement amounting to £122,000.

  8. The removal of efficiency retirement other than in exceptional cases where there is a compromise agreement will result in a reduction in the numbers of early retirements which will, in turn, reduce the costs to the County Council. Any costs associated with these compromise agreements in schools will fall to the school’s budget in future.

  9. The introduction of early retirement for those who have certified chronic health problems but who do not qualify under the ill health retirement rules will give rise to an increase in numbers of early retirements among qualifying Green Book employees. Occupational Health estimate that there could have been up to six such cases during 2005-6 which might have qualified under this new rule. The costs of allowing early retirements of this kind will fall immediately to directorate budgets unlike ill health retirements under the Regulations which are initially funded from the pension fund.

    10. RECOMMENDATION

  10. The Cabinet is RECOMMENDED to:

          1. agree that existing policies and procedures will be applied to cases where estimates of benefits have been given and the termination of employment date is on or before 31 March 2007; and

          2. approve the attached Redundancy Policy for Green Book Non-School Employees and policies on Retirement for ‘Green Book’ Employees and Teachers and Teachers’ Premature Retirement Compensation Scheme.

STEVE MUNN
Head of Human Resources & Organisational Development

KEITH BARTLEY
Director for Children, Young People & Families

Background papers:
Employment Equality (Age) Regulations 2006.
Local Government (Early Termination of Employment) (Discretionary Compensation) Regulations 2006.

Contact Officers:
Sue Corrigan, County Human Resources Manager Tel 01865 810280
Rick Harmes, Head of Strategy & Performance Tel 01865 810626

January 2007

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