RPI to CPI Early Day Motion 1032

Ripoff_2

JohnB47 wrote: »

Steve Webbs statement: “Next year’s pensions and benefit rates will be announced in the usual way, by Ministerial statement in December. The Government remains committed to the triple lock for the basic State Pension and to the CPI increases for the additional state pension.” is blatantly vague. A typical polititians words - couched so that they can be later interpreted, by them, to mean anything they wish.

For example the CPI figure used could be a 6 months, or twelve months average rather than the Sept figure and still allow our 'honorable' member to say " well, that's what I meant - what's the problem?"

I agree and is it any wonder why people do not trust our politicians.

I also think that if Osborne & Co do not honour even the lesser CPI for pensions as of September 5.2% for next years increase then they will be committing political suicide.

Some pensioners have bought the line about CPI and some have accepted the change, quite wrongly in my opinion but should Osborne renege on this then I do believe the people that have accepted the argument for change to CPI will think twice, well I would hope they will.

To those who have accepted CPI then I hope you are never robbed, because that is exactly what has happened to you. You have been robbed and mugged just as much as a thief coming into your house and stealing your hard earned goods, no difference. I would hope that these people will not want to be robbed and mugged a second time and are watching the Autumn statement very closely indeed.

viridens

So dear George has announced today that benefits will be uprated by the September CPI inflation figure, 5.2%, but that rail fares will increase by RPI plus a sum.

I'm not too surprised but very disgusted to note that government still clearly believes in RPI when it benefits big business.

JohnB47

viridens wrote: »

I'm not too surprised but very disgusted to note that government still clearly believes in RPI when it benefits big business.

..... and themselves and their mates in the Bank of England.

hugheskevi

Office for Budgetary Responsibility have published paper on long-run difference between RPI and CPI.

They have increased their estimate of the gap to between 1.3 and 1.5 percentage points.

Paper is here.

A 1.4 percentage gap would mean a 40 year old leaving their employer would have a pension at age 65 which is nearly 30% lower under CPI uprating than under RPI.

xylophone

viridens wrote: »

So dear George has announced today that benefits will be uprated by the September CPI inflation figure, 5.2%, but that rail fares will increase by RPI plus a sum.

I'm not too surprised but very disgusted to note that government still clearly believes in RPI when it benefits big business.

"Pensions minister Steve Webb argued that such a change would undermine people's confidence in saving into a pension.
'Contrary to press speculation, we do not plan to grant schemes a modification power to make it easier to use CPI where they do not already have the power to amend scheme rules,' he said.
'We believe that members' trust in schemes and the scheme rules could be severely damaged if we intervene to give schemes the power to change their rules where the scheme does not already have such a power.
'Trust in pensions is important and I believe intervention demands strong justification.'
The decision means that schemes with the RPI link 'hardwired' into their rules will not be able to switch to the lower-paying CPI.


Read more: http://www.thisismoney.co.uk/money/pensions/article-1709270/RPI-link-saved-for-8m-final-salary-pensions.html#ixzz1fCg9g9im

If the Bank scheme has RPI hardwired into its rules then the Trustees would find it virtually impossible to change?

Apart from that, I read that some while ago, the assets of the Bank of England Pension Scheme were switched almost exclusively into RPI index linked gilts so that its liabilities could be met?

viridens

hugheskevi wrote: »

Office for Budgetary Responsibility have published paper on long-run difference between RPI and CPI.

They have increased their estimate of the gap to between 1.3 and 1.5 percentage points.

Paper is here.

A 1.4 percentage gap would mean a 40 year old leaving their employer would have a pension at age 65 which is nearly 30% lower under CPI uprating than under RPI.

Contrast that with government spin.
Speaking shortly after PMQs today Andrew Maude stated that public sector pensions are "index linked and inflation proof" and that "those within 10 years of retirement will be able to retire on their existing terms", confirming the retention of acquired rights.
RPI is there in black and white in my pension terms. What about that right?

I have not heard a direct challenge to government from the opposition on the RPI/CPI swindle, which does not bode well for the E-petition debate. Have I missed something?

Andy_L

viridens wrote: »

RPI is there in black and white in my pension terms. What about that right?

The scheme rules refer to indexation in accordance with, IIRC, the 1974 Superannuation Act which grants increases by (paraphrasing slightly) whatever rate the Secretary of State thinks reflects the increase of prices . Another act then says that the rate used will be RPI. It is this 2nd act that has been changed thus changing indexation.
Lots of other documentation say RPI, which is one of the planks of the legal challenge to the change

BobQ

Andy_L wrote: »

The scheme rules refer to indexation in accordance with, IIRC, the 1974 Superannuation Act which grants increases by (paraphrasing slightly) whatever rate the Secretary of State thinks reflects the increase of prices . Another act then says that the rate used will be RPI. It is this 2nd act that has been changed thus changing indexation.
Lots of other documentation say RPI, which is one of the planks of the legal challenge to the change

You say "the scheme rules" but which scheme rules are you talking about?

I have a preserved pension under the Civil Service 1972 Scheme Rules. The literature provided to me at the time said that that the pension wouldbe index linked to RPI and the scheme rules last amended in 2010 state:

"Retail prices index" means the general index (for all items) published by the Office for National Statistics or, if that index is not published for a relevant month, any substituted index or index figures published by that office.

Am I wrong to conclude that politicians cannot be trusted!

ExBT_Bob

Judicial review decision has found in favour of the Govt.

More need than ever to add your name to the e-petition at

http://epetitions.direct.gov.uk/petitions/1535

Now up to 89K - needs 100K

Andy_L

BobQ wrote: »

You say "the scheme rules" but which scheme rules are you talking about?

I have a preserved pension under the Civil Service 1972 Scheme Rules. The literature provided to me at the time said that that the pension wouldbe index linked to RPI and the scheme rules last amended in 2010 state:

I mean the scheme rules as laid before parliament, rather than any members handbooks, guides, pamphlets etc.
ie, in your case,

http://www.civilservice.gov.uk/wp-content/uploads/2011/09/2011Generalprovisionssection_tcm6-38487.pdf

and

http://www.civilservice.gov.uk/wp-content/uploads/2011/09/PCSPS-Rules-1972-section_tcm6-3502.pdf

Whilst they define the meaning of RPI as per your quote there is no commitemnt to use it for anything. Any commitment to indexation always refers to The Pensions (Increase) Act 1971 which itself is then affected by The Social Security Pensions Act 1975

BobQ wrote: »

Am I wrong to conclude that politicians cannot be trusted!

You might say that, I couldn't possibly comment