RPI to CPI Early Day Motion 1032

Haybob

The question is, what were pension scheme members' expectations regarding the inflation links? I would suggest that they all expected rises in line with the RPI and I can see little evidence that any scheme advised members otherwise.

MEY_3

I'd go further Haybob. I'd say that in spite of disclaimers the schemes were grossly and consistently misrepresented to the members over decades by the trustees and the employer. Why issue any scheme handbooks illustrating index-linking if what they portray is not the reality? How could one tell which elements of the scheme were a fact and which were a fiction? Without sight of a trust deed to make comparison who out of the membership could say how accurate any of the guides were? We trusted the trustees to fairly relate the details and mechanics of the scheme. Patently they didn't do that.

cvd

"Official statistics hide true increase in cost of living"

http://www.guardian.co.uk/business/2011/feb/15/official-statistics-hide-severity-uk-inflation

The first page of the original article is here:

http://www.deepdyve.com/lp/ios-press/how-relevant-are-the-united-kingdom-s-official-measures-of-price-4feNwpfzIG

Unfortunately the complete article does not appear to be publicly available.

Pugliese

In case it is of interest here is the 'standard 'reply from the RBS pension scheme:

As you are probably aware, the Chancellor of the Exchequer announced in the Budget statement on 22 June that the Government intends to use the Consumer Prices Index (CPI) rather than the RPI for determining the minimum increases that pension schemes have to award.

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The index to be used for determining increases to pensions in deferment is defined as the Retail Prices Index (RPI) within the Pension Fund Rules. Generally the Trustee of the Group Fund would have to agree to amend the index for these.

In December 2010 the Government published its consultation on proposals to use CPI as the measure of price increases on private sector occupational pensions. The consultation runs until March 2011 and the main points in the consultation are:

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• [SIZE=+0][SIZE=+0][/SIZE][/SIZE][SIZE=+0][SIZE=+0]
• That there is no proposal to introduce legislation that would override pension scheme rules to adopt CPI as the measure of inflation for indexation and revaluation.
• That there is no proposal to introduce a modification power to allow schemes to use CPI as the basis for revaluation and indexation of members' benefits.
• That some schemes will continue to increase pensions in payment using the RPI as the measure of price inflation. If at any point RPI is lower than CPI, those schemes with RPI increases would have to increase by CPI for that year, as it would be the statutory minimum. The Government is proposing to take action so that any scheme choosing to retain RPI increases would not have to pay the higher of CPI or RPI in any given year.
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[SIZE=+0][SIZE=+0]As I am sure you will appreciate this is at the consultation stage at present and the exact impact of any change, if any, on the Group's Pension Funds is still not yet confirmed. Once we have more information, if this will result in a significant change to the Group Fund's practice then this will be communicated to members. [/SIZE][/SIZE]

Ripoff_2

People ask me all the time WHY is this so important to you? I don't understand? What's the difference?

So I say to them, with JAN RPI at 5.1% and CPI at 4% this is exactly why this change is so important to your wealth and wellbeing. If CPI is used for indexing your pension, as it will be from April at 3.1%, your wealth goes down each year by the difference between RPI and CPI, simple.

It's a CON TRICK by a Tory led Government that is robbing you, the many private BT, BA etc and public pensioners.

viridens

Two quick RPI / CPI points

1. I watched and listened to BBC news reports on TV and Radio yesterday. The inflation figures used were CPI, and there was no mention of RPI. I know that CPI is the government's 'preferred' measure of inflation, but I did not realise that the BBC were complicit in this change, and hoped that the BBC would at least mention RPI for comparison or consistency with similar reports in previous years.

2. Government argues that CPI is more applicable to pensoners' circumstances since it does not consider mortgage repayments. I note that the RPIX figure, which similarly ignores mortgages, is equal to RPI at 5.1%.

Finally, I am finding there are still many PS pensioners out there who are still not aware that they wil be affected by these proposed changes. Please find the time to contact old colleagues, write to your local newspaper etc.
Hope to see you in Parliament Square on 1 March.

bendix

Ripoff wrote: »

Slowly but surely the MP's that have signed the EDM is still increasing, So far 111 MP's have signed.

LAB = 89 LD = 4 CON = 0 Oth = 18

LMAO. 89 Labour MPs? Let me get this right - this great and righteous cause is supported by only 1 in 3 Labour MPs, of which there are only 258 anyway.

Does that not indicate to you that apart from their grand political gestures, then most Labour MPs actually support the move and would likely have done the same thing as the Coalition?

chris_m

viridens wrote: »

2. Government argues that CPI is more applicable to pensoners' circumstances since it does not consider mortgage repayments. I note that the RPIX figure, which similarly ignores mortgages, is equal to RPI at 5.1%.

Since interest rates haven't changed, surely that is correct?
There will have been no inflationary effect on mortgage payments so the RPI basket will show a zero increase for those, the same as if they weren't included?

Prof_as_was

bendix wrote: »

LMAO. 89 Labour MPs? Let me get this right - this great and righteous cause is supported by only 1 in 3 Labour MPs, of which there are only 258 anyway.

Does that not indicate to you that apart from their grand political gestures, then most Labour MPs actually support the move and would likely have done the same thing as the Coalition?

I am breaking a resolution not to rise to drivel, but this is seriously misleading drivel.



Parliamentary convention prevents office holders, including shadow office holders, from signing EDMs. So only about half of sitting Labour MPs can sign. So around 66% who can, have.



The unsupported assertion that the small number remaining, who can sign and haven’t, therefore "actually support the [CPI] move and would have done the same thing” is drivel on speed.



As to the shadow office holders, the official opposition, the remainig roughly 50% of the PLP, we have a powerful indicator of where they might currently stand - the Shadow Pensions Minster herself publicly attacked the change to CPI a couple of weeks ago.

Andy_L

viridens wrote: »

Two quick RPI / CPI points

1. I watched and listened to BBC news reports on TV and Radio yesterday. The inflation figures used were CPI, and there was no mention of RPI. I know that CPI is the government's 'preferred' measure of inflation, but I did not realise that the BBC were complicit in this change, and hoped that the BBC would at least mention RPI for comparison or consistency with similar reports in previous years.

The inflation news this morning was all about the BoE having to explain why inflation was outside the Government set target. As that target is CPI based, RPI is largely irrelevant to the news report and useless for historical comparission as the BoE has been working to CPI for 10sh? years (and were using RPIx before that anyway)