"Rule of 85" for Local council pensions is not discriminatory

The Scottish Executive is wrong to claim that it must raise local council workers' pension ages under European law, according to the European Commission (EC).

Last month Tom McCabe, the Executive's finance minister, claimed that the current system for the 250,000 employees - under which they can retire on full pensions as soon as their age plus their length of service totals 85 years - would contravene a European directive on equal treatment in the workplace.

But a senior EC official swiftly responded that article 6 of the directive, whose provisions relating to age discrimination are expected to come into effect in the UK this October, allows governments to treat people differently on grounds of age in certain circumstances.

"The directive has no influence on pension value or pension age," said Katharina von Schnurbein, EC spokesperson on social affairs, employment and equal opportunities. "It is completely up to the member state. If they think it is reasonable for people to retire at 60, under European law that is perfectly legal."

Public sector union UNISON has claimed that the Executive's plan to raise council workers' retirement age to 65 is being made purely on financial grounds, using the directive as a smokescreen.

Joe di Paola, UNISON's Scottish organiser, has asked to see the legal advice that the "rule of 85" is discriminatory, but the Executive has refused.

An actuarial report on the affordability of Scotland's local government pension scheme has also been withheld from the union.

* See also "Pensions challenges face both private and public sector unions" elsewhere in this issue.