RPI to CPI Early Day Motion 1032

teacher_retired

Andy_L wrote: »

AIUI/IMO etc the legal challenge is that the attemt to apply it to past service (ie service accrued when the 1974 act said RPI) is a change to accrued rights which is prevented under various other bits of pension legislation.
Change for future accrual is fair-game, and down to negotiation, industrial action, political lobbying and recruitment/retention difficulties

An extremely good point and the main crux of my argument. I hope our union representatives push this hard.
Incidentally I do feel March 27th 2011 is going to be when the main union pressure starts

teacher_retired

Thicko2 wrote: »

What really annoys me on this topic is the lack of knowedge and the concept of fairness that appears to have been completely removed by this coallition government in their attempts to handle this issue, and public sector pensions generally.

NHS pensions fo example. Currently this is a pay as you go fund and is also a net contributor back to the treasury after employer and employee contributions are accounted for - to a tune of over £1bn. Plans are in place to cap employer contributions if actuary forecasts demand it, hence risk is passed on to employees for the futre, many of the issues identifed by Hutton are already implemented, increased and tiered member contributions, 65 retirement age scheme etc. This was all negoitated in a fair and reasonable manner, not by such unilateral action by the government.


So with a stroke by ministerial decree, the RPI to CPI devalues members CTV value by circa 15% despite the fact the fund is in surplus, and we are told to expect to pay 3% more contributions in the future is the current rumour. I might have more sympathy for the government view if the scheme was a net drain on the treasury but it is not.

When every bit of documentation from the pension agency has referred to RPI increase for god knows how many years, the unfairness for changing the benefits of past service appears morally questionable and i hope will be challenged in court. The whole approach is in line with the coallition agenda.

They do have a very poisened challice potentially to face, by continuing to devalue the benefits and ask members to pay more, will they lose the take up rate. If so there will be less payers in, to pay out current pensioners, leading to a greater drain on the public finances.

This is what needs to be pushed hard and tested in the courts by our representatives.

Ripoff_2

JohnB47 wrote: »

My MP said that, as a minister, he is prohibited from signing EDMs. So presumably that's why you don't see any cabinet ministers signatures. Keep up the good work

There are certain rules on who is allowed to sign EDM's you can view the details here http://www.parliament.uk/about/how/business/edms/

Who won't sign?

The following people in Parliament normally won't sign EDMs:

• Ministers and government whips
• Parliamentary Private Secretaries
• The Speaker and his deputies

Hope that helps. Ripoff

Thicko2

Dear Old Slaphead

Please could you enlighten me how i am ill informed on funding issues on the NHS pension scheme?

Some facts below - perhaps i was misguided in that it is actually a £2bn contribution back to the treasury. What's the odd billion between friends and banks!

SOME FACTS ON THE NHSPS 2009
IN ENGLAND AND WALES

ACTIVE
RETIRED
DEFERRED

1.380m
610,000
476,000

EXPENDITURE
INCOME IN*

£5.625 billion
£7.780 billion

*Income includes employer /employee contributions

Ripoff_2

All, the following website http://www.pensionersagainstcpi.org/index.html it is a new website to gauge the quantity of people that actually support fighting this change.

One of the problems with anything like this is "How much actual support is out there". Show your support by simply clicking on the Show Support Link, at the bottom of the page.

The site also contains all the information and links to the various organisations. Very useful indeed.

BaldGringo

You may be interested to know that some Private schemes, namely the Ericsson Employee Benefit Scheme, are jumping onboard the change to CPI and implying to it's members that the change is statutory.

So it would appear that this Government as set in motion a chance for all Pension schemes (Public or Private) to cash in at the expense of their members.

RichandJ

BaldGringo wrote: »

You may be interested to know that some Private schemes, namely the Ericsson Employee Benefit Scheme, are jumping onboard the change to CPI and implying to it's members that the change is statutory.

So it would appear that this Government as set in motion a chance for all Pension schemes (Public or Private) to cash in at the expense of their members.

Is that for revaluation (for deferred pensions) or indexation (for pensioners) ?

As I've posted elsewhere the schemes I deal with have mainly had RPI 'hard coded' in their Rules for increases to pensions in payment but have simply referred to 'the legislation' (Schedule 3, PSA 1993 if anyone's interested) for increases to a deferred pension before it comes into payment.

Scheme Rules referring to the legislation mean those schemes will now use CPI. CPI has from 1-1-2011 been incorporated into the annual Occupational Pension Schemes Revaluation Order, sometimes known as Section 52a Orders, which is enabled as a Statutory Instrument.

If the above scheme's Rules (which trump all correspondence, booklets, chats with HR & workplace 'knowledge' or rumour) refer to the legislation then CPI will be used unless a Rule change is proposed.

I capitalise Rules because regardless of your feelings on the 'fairness', morality or otherwise of this change that is what a scheme has to abide by.

BaldGringo

Hi RichardJ.

It says deferred pensions will now increase by CPI rather than RPI from 2011 onwards.

RichandJ

Then their Rules probably say something like this :

"deferred pension shall be increased......in accordance with paragraphs 1 and 2 of Schedule 3 to the 1993 Act.""

which I've lifted direct from an actual set of Rules. Which means they are legally obliged to use the Section 52a Order I mentioned above, which is based on CPI for retirements from 1-1-2011.

Any change in such a Rule would almost certainly require the consent of the sponsoring employer as it would have funding implications and, although this is my personal view, it is highly unlikely any employer at present is going to volunteer to pay extra money to a defined benefit pension scheme.

Ripoff_2

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