Age law could spark pensions meltdown

Government
plans to outlaw age discrimination in the workplace are so pitted with holes
they could force a mass closure of pension schemes and the removal of staff
benefits by scores of employers.

Employer
bodies, including the Employers Forum on Age (EFA) and the Engineering
Employers’ Federation (EEF) along with charity Age Concern, have joined law and
pensions experts in warning the Government of a pension meltdown.

They
say the current consultation document, Age Matters, would force employers to
completely rewrite their retirement policies. Organisations would also have to
redraw their policies on redundancy, unfair dismissal and recruitment.

The
EFA, which represents more than 160 member organisations that collectively
employ more than three million is leading the campaign for changes in the
proposals, which are due to become law by October 2006.

EFA
director Sam Mercer said that, in their current form, the plans represent a
distinct lack of joined-up thinking in Government departments and display
little grasp the reality of pension schemes.

Mercer
warned the policy-makers not to "hide behind a poorly drafted
directive" or they would come up against "catastrophic
consequences".

She
said HR was pivotal to campaigning against the plans, or employers would find
themselves facing a lot of "legal uncertainty". However, she said
that, so far, the Government was showing willingness to listen to employers’
concerns.

Pensions
specialist Jonathan Moody from law firm Mayer, Brown, Rowe and Maw said the
proposals as they stood would leave employers open to discrimination claims,
even if they comply with the letter of the law.

"Rather
than run that risk, employers may choose just to close down their pension and
benefits altogether," he said.

David
Yeandle, pensions expert at the EEF said employers could also face legal action
from new and younger employers if occupational schemes are closed to new
members.


Ministers trying to ward off a looming pensions crisis, as funds suffer from
plummeting share prices, have devised plans to delay people retiring by giving
them up to £30,000 lump sums if they continuing working until 70. Critics say
people must not be ‘forced to work until they drop’.


The Government has successfully challenged an tribunal decision that would have
granted hundreds of thousands of older workers new rights.

By
Penny Wilson

www.efa.org.uk

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