Tynwald rejected a call for a government body to reconsider its decision to drop plans to raise the minimum retirement age for public servants.
That call was made by former Policy and Reform Minister Chris Robertshaw during his emergency debate on the issue.
Mr Robertshaw said he had been ‘absolutely astonished and deeply disappointed’ that on the very same day it was announced the state pension might not be payable until the age of 74, it was confirmed public sector early retirement would stay at 55 years.
‘Such statements on the same day potentially breed discontent and a feeling there is one rule for those in government and another for everyone else,’ he said.
‘Let us not find ourselves in a number of years’ time with people struggling in some cases to work into their late 60s and early 70s, trying to get to their state pension entitlement whilst continuing to pay tax, which in part would go to pay the pensions of those in the public sector who were able to retire some 15 years earlier.’
Michael MHK Alfred Cannan suggested the net liability to the public purse had spiralled since 2012, from £22m to £58.4m and a solution needed to be found quickly.
He claimed proposals got ‘fudged, fiddled and watered down’ and that every single member of the government’s working group was potentially conflicted.
Mr Cannan called for an independent review of public sector pension schemes and suggested the cost was irrelevant as the issue had to be sorted out.
Lib Van leader Kate Beecroft (Douglas South) said: ‘We are never going to rule out unfairness, but we cannot be party to making something more unfair. People are rightly outraged that there is going to be 19 years’ difference in retirement age. I think that is not fair.’
Policy and Reform Minister John Shimmin, who chairs the Public Sector Pensions Authority’s pensions committee, said: ‘I absolutely accept the view that if government is addressing the sustainability of state pensions, then it must do the same with public sector pensions. I fully understand the public’s sensitivity and anger at any apparent difference of approach between the two issues.’
He insisted he had approved the press release announcing the shelving of plans to raise the minimum early retirement age some 10 days before the Treasury Minister’s statement but consultation on it had led to the delay.
‘I apologise unreservedly for all the embarrassment it caused by having the two of those merging at the same time. That was never the intention,’ he told Tynwald.
But Mr Shimmin insisted the critics had not been comparing like for like.
He said most public servants do not retire at 55 and the average current age of retirement is between 59 and 60 - and so raising the minimum permissible age to 58 would have little effect.
Mr Shimmin said those who retire early have their benefits reduced by about 5 per cent a year so it was actually cost neutral. ‘Removing the right to retire early does not in reality result in any sustainable savings,’ he said.
He insisted raising the minimum retirement age remained on the table for new employees and new members of the unified scheme. Legislation forbids a retrospective worsening of accrued benefits pension members have built up, he added.
Ms Shimmin said supporting Mr Cannan’s motion would only bring about further costs and delays. Mr Robertshaw said he no longer had confidence in the PSPA working party.
Tynwald rejected Mr Cannan’s amendment and instead voted in support of Mr Shimmin’s amendment which noted the PSPA’s progress towards reforming public sector pensions and for final proposals to be submitted to Tynwald in February 2016.