RPI to CPI Early Day Motion 1032

Haybob

I appreciate what you are saying, it is the Government that I believe is responsible for the mis-selling, not the Trustees. The Trustees are governed by the change of indexation that the Government choose to apply each year. However, people make decisions on what they are being told and this is why I believe the Government have indirectly (some may think directly) caused any trust in pensions schemes to be broken. Leave alone the members who have contributed around 6% of their salary with the expectation of RPI, others have bought added years with their money, commuted redundancy payments for extra pension or volunteered for early retirement all with the expectation that their pensions would be linked to the RPI. If this change to pensions is enacted then the Government have got away with a change that even Robert Maxwell would have been envious of.

JohnB47

shaunrc wrote: »

I make a comment on this thread from time to time because I am an economist who has the full Chartered Insurance Institute pension qualifications. Indeed I am a monetary economist who discusses inflation and our inflation indices a lot.

I posted before on the differences between our two inflation indices and would just like to make everyone aware that it has come up again this week as the Office for National Statistics has made a change which will influence the inflation numbers (upwards as time goes by in my opinion) and also the difference between CPI and RPI.

For those interested I blog on http://notayesmanseconomics.wordpress.com

Thanks for that.

scottiepaul

"access to the trust deed was not readily available"

Access to TDR is a legal requirement on request of the member. They are ofter well over a hundred pages long and full of very complicated drafting so sending a copy to every member is neither required by law nor sensible.

If you'd wanted to see a copy at any point all you had to do was ask.

Appreciate that member expectation is a big deal, but unfortunately that's not a legal entitlement.

As to why the booklets specified RPI, mostly because at the time the booklet issued that was true, and has been true until now. Ideally, it should have said "in line with statute, which is currently RPI capped at 5%", and then that updated to "in line with statute, which is currently RPI capped at 5% for Pensionable Service prior to 6 April 2005, and RPI capped at 2.5% for Pensionable Service on and from 6 April 2005".

That would have been clearer.

Everything with the benefit of hindsight - but what was stated in the booklet was factually accurate at the time, and you can't expect everyone to have a crystal ball.

If the government moved to an index rating higher than RPI, I doubt you'd all be waving your booklets in the air screaming "but you told us RPI!!" now would you?

Of course not, and then if Schemes tried to say you had been promised RPI and they didn't need to give you the higher level of increase, you'd be up in arms about how they can't just ignore legislation and try to rely on something they told us 15 years ago.

When you turn the argument on its head it doesn't sound quite so strong...

And depending on what your Rules say CPI has been applying since 1 January. So it's already in, for both increases (under s51(2) of the Pensions Act 1995) and revaluation (under the 2010 Revaluation Order).

JamesU

scottiepaul wrote: »

And depending on what your Rules say CPI has been applying since 1 January. So it's already in, for both increases (under s51(2) of the Pensions Act 1995) and revaluation (under the 2010 Revaluation Order).

Including a switch from RPI to CPI when calculating CETV pension transfer values for public sector workers. Calculations were suspended for months (e.g in divorce cases) but have now resumed and are being calculated according to CPI.

The issue is not the fairness or expectation from contractual terms according to past information received, the switch from RPI to CPI is underway irrespective. The real issue at this point in time is whether or not CPI is a satisfactory measure of inflation and that seems to be the basis for the EDM motion on this thread.

JamesU

bendix

So, guys, tell me . how many Labour MPs (virulently opposed to everything the Tories do, don't forget) have signed up now. Have you reached even 50% of Labour MPs yet?

Or are you getting no traction whatsoever because, like it or not, even Labour MPs know that the pension problem needs to be addressed?

Don't you wish you'd made your own provision now?

MEY_3

scottiepaul and JamesU -

I'm not convinced the reality of getting sight of the trust deeds is as straightforward as you suggest. Do private pensioners ever get sight of the actual terms of their pension contracts? If similar wording was employed would they not feel that they had a case if their provider had never clarified an element over the course of 40 years?
I cannot accept either that the RPI issue was factually accurate as your post above illustrates. It should have stated purely that pensions were indexed link. That would have invited further inspection. To say it is linked to RPI is, and was, factually inaccurate. If the booklet inaccurately portrays the scheme how can it be challenged? How would the layman know which bits are accurate and which are not? It is the trustees duty to be as accurate as is possible. At no time was saying increases are by RPI correct as that isn't what was in the trust deed. This isn't hindsight speaking, this is saying no member was alerted to the reality because the booklet was unequivocal over index linking. The lax wording has oiled the wheels that have created the impact.
I agree with you about the RPI reverse argument to some extent but of course RPI as a measure of a cost of living uprater could have been adjusted if necessary rather than another rating introduced, that was not designed for purpose. Tweaking RPI would have made more sense if trying to reflect cost of living increases but of course that may have led to a higher % rise. It is patently obvious this whole change is to reduce costs and not reflect cost of living increases. It is the government that is disingenuous.
I think it fair to say, in the more "innocent" times of its inception everyone expected RPI to reflect weakening purchasing power and would have instinctively imagined the only adjustment that would be made would be to hone it to greater accuracy. That is precisely why this irrational change to CPI (except to save cash) could never have been envisaged.

JamesU - I agree with you fundamentally but still believe the trustees and employers have exacerbated the matter through their sloppy and lazy regurgitation of wording in booklets and that has led to this disquiet.

MEY_3

Bendix - Missing the point, yet again. Whether the "pension problem" needs to be addressed or not the government CPI-RPI manoeuvre doesn't do that, nor is your comment even remotely relevant to the thread.

Interested_Taxpayer

bendix wrote: »

Ho hum.

No bendix! It's Hua Hin is it not? Better take yourself off there very soon because you never know some Thai public sector official might huff and puff away that nice new house your building with your fab self made pension that you keep telling us about again and again.

We wouldn't like to see you angry and upset would we? It would no doubt be too much for your expat chums to take day after day night after night.

This of course will allow us to remain here in the UK on thread and with our just fight to right this wrong. Good bye.

bendix

Interested_Taxpayer wrote: »

No bendix! It's Hua Hin is it not? Better take yourself off there very soon because you never know some Thai public sector official might huff and puff away that nice new house your building with your fab self made pension that you keep telling us about again and again.

We wouldn't like to see you angry and upset would we? It would no doubt be too much for your expat chums to take day after day night after night.

This of course will allow us to remain here in the UK on thread and with our just fight to right this wrong. Good bye.

Your just fight to right this wrong . . . LMAO. Are you batman?


But, seriously, answer the question. Why do you think you only have a paltry 34% of opposition MPs signed this EDM so far? Genuine question.

Prof_as_was

bendix wrote: »

But, seriously, answer the question. Why do you think you only have a paltry 34% of opposition MPs signed this EDM so far? Genuine question.

If the question really is genuine, see my post 600, which answers it (though probably not for you, being a hard man to satisfy). Was wondering if you missed it. The figures have moved even further against you in the meantime.