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'End This Obscene Pension Uplift'
Martin Shipton, The Western Mail
United Kingdom
July 13, 2005
A call has been made to end what has been described as the 'obscene' practice of using public money to give extra 'pension years' to selected council workers who have not worked for them.
Under the system, the application of which is shrouded in secrecy, small groups of councillors decide to reward individual council employees with 'added years' of pension contributions.
The Western Mail has learned that there have been instances in Wales where some council officers have had 10 years of extra contributions added to their pension account, and others where actual contributions have been doubled by additional years being added, for years not actually worked.
Minutes from a Caerphilly Council Cabinet meeting held last month show that a decision was made in principle to grant an unspecified number of 'added years' to retiring chief executive Malgwyn Davies.
And Independent councillor Anne Blackman said she had referred the matter for investigation to the Wales Audit Office.
She said, 'Personally, while the pension scheme may allow this practice, I think the policy of awarding 'added years' that haven't been worked is obscene. No wonder the pension fund is in such dire circumstance.
'Every year the first draw on the revenue account is to uphold the pension fund. This year it was about £1.8m.
'I am sure my councillor colleagues across the board have no wish to put the position of already genuine retired employees of the council in jeopardy, but adding years that have never been worked is disgusting in my view.
'In view of the fact that ordinary members like myself are not allowed by the monitoring officer access to agendas or reports of the early retirement sub-committee, we have no knowledge of the full extent of what is going on, or the cost to the public purse.'
Mrs. Blackman added, 'Caerphilly County Borough is, on the whole, a deprived area. Therefore, while the pension scheme may allow this practice, surely as a council we should be discussing its continuation, especially in the light of what is happening with many of our constituents' pensions.
'Even teachers don't get 'added years'. This policy is setting one section of council staff against another set. Decisions are taken on an ad hoc basis without any consistency.
It is understood that the previous Plaid Cymru administration at the council reduced the maximum number of 'added years' payable to an individual from 10 to six and two-thirds. Rules were also tightened so that employees under 55 could only benefit from early retirement deals in exceptional circumstances.
A spokesman for Caerphilly Council said, 'The council, like many other local authorities across the country, sometimes offers added years when calculating redundancy or retirement packages. Employees at all levels and pay scales may be eligible depending on their personal circumstances such as age and length of service.
'In each case, the council only approves this where a sound economic business case is made out. The council believes this is good practice and helps to ensure smooth and efficient delivery of services.'
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