A state pension age increase from 65 to 70 that would have affected around 4,500 employees of the States of Guernsey has now been scrapped after Unite secured a pension deal.
Following a legal challenge by the trade union against the States of Guernsey and a round of intensive negotiations, employees will revert to a pension age of 65 and be entitled to a lump sum on retirement.
New rules introduced for the island in 2016 for public workers determined the state pension age would start to increase gradually from 2020 onwards, for people born on or after 1 January 1955.
In general, the pension age would increase by two months annually beginning on 1 March 2020.
Unite, an industry-wide trade union with 1.4 million members, said the imposed changes also saw usual automatic lump sum payments on retirement scrapped.
According to Peter Hughes, Unite regional secretary with responsibility for Guernsey, this is good news for the States of Guernsey workforce.
He said: "Employees of the States of Guernsey are the backbone of the island, delivering a whole range of services on which the community relies on.
“The 'work until you drop' pension plans that the States of Guernsey sought to impose on its workforce would have seen some workers forced to work until they were 70 to get their full pension. The plans would have seen automatic lump sum payments scrapped too.
"Under the new pension arrangements negotiated by Unite this is now not the case. Workers can now once again look forward to a pension age of 65 and a lump sum on retirement."
Jonathan Le Tocq, member of the States of Guernsey Policy & Resources committee, said this agreement provides a further option for all members of the scheme affected by the changes introduced in 2016.
He said: “The committee will now take the necessary steps to amend the pension rules and then work with Unite and other unions to enable affected members (whatever their union) to choose the option each considers appropriate for their own circumstances."
In the meantime, Guernsey is introducing auto-enrolment for the residents of Guernsey and Alderney, which is expected to take off by 2020.
maria.espadinha@ft.com
