Redundancy packages may have to be re-assessed as a result of the postponement of the age discrimination regulations for pensions, according to consultancy Watson Wyatt.
Earlier this month, the government announced the pension provisions in the age discrimination regulations – due to come into force in less than two weeks – will be delayed until 1 December. The government said the delay was to allow more time for the industry “to get to grips with the changes”.
Kathryn Armitstead, a senior consultant at Watson Wyatt, said the decision to postpone was the right move, but will cause new problems for employers. “Companies in the midst of making staff redundant are faced with a temporary but immediate problem,” she said.
Redundancy arrangements usually involve a combination of pension and non-pension benefits, and it is the blend of the two that employees – and trade unions – measure to ensure they are receiving a fair deal.
“Employers have been working with staff representatives to develop an overall redundancy package that is acceptable as well as compliant with the new laws,” Armitstead said.
“The deferral of part of the regulations, and uncertainty as to their final form, means that terms offered over the next couple of months will need to be revisited very rapidly, ” she said.
Another HR consultancy, Mercer, called on the government to largely exempt pension schemes from the age laws, rather than attempt to exclude specific rules that may only apply to some schemes. “It can then target the few scheme rules and practices it feels should not be permitted,” the firm said.
Pension provisions require ‘major surgery’
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