RPI to CPI Early Day Motion 1032

MEY_3

DavidHayton wrote: »

Well I thought that the switch from RPI to CPI was a great idea.

How else would the government have ensured that those already in retirement take their share of the pain. About every other change being proposed hits the young disproportionately and spares the old. Our children are our future and we rip them off at our peril.

I am not being ironic, and I'm a public sector worker in a final salary scheme so this will hit me eventually as well.

David

By what logical basis is it "a great idea"? Is not RPI meant to reflect inflation? Is CPI not less suitable for that than RPI?

And then of course, you have the small detail that the government are emphatic that the change ISN'T about deficit reduction, and that it isn't a temporary change whilst the finanacial crisis is dealt with. It is the Labour Party that believe the change should be temporary, not the government. So I cannot see the logic in your post, David.

Where too is this idea that this issue is a rip off of the young coming from? The wealth of the old permeates to the young eventually anyway (if there is any "wealth" in it at all).

Why is not maintaining pension provision a benefit to the young? We should be aiming at good pensions for all. The young too will be wanting decent pensions when they approach retirement, and this move will create not one extra job for those youngsters but may well help (with Hutton) towards turning more public sector jobs into MacJobs

Bill1980_2

Thank you for all of the helpful replies regarding how deferred pensions will be indexed. I agree that at the moment I am an active member and that will only change if I leave local government.

Some additional information regarding any changes to the pension scheme was sent out recently by our pensions team however, stating, "If changes are made to the existing pension scheme all accrued benefits will be protected". Sounds good, it then goes on to say that your salary at the point that the old scheme ends will be the salary that the pre accrued portion of your pension will be calculated with.

They go on to say that this will be “indexed each year until you retire”.

If this is the case there is no way that anyone (If they stay in public sector or not) will not have there existing pension reduced each year by what the difference in RPI and CPI is until they retire! This reduction will then continue in there retirement for the entire pension accrued.

I have concluded that there is no way then for me to protect my existing (apparently protected) pension if I stay it will be linked to CPI and if I go the same will happen.

This will greatly affect anyone with a public pension and possibly the younger more so.

MEY_3

DavidHayton wrote: »

Well I didn't expect to be popular when I posted my comment!

Of course it is about deficit reduction. Everyone knows this but the rules of politics means that it can't be admitted.

The rules of politics do not allow politicians to fly in the face of the evidence though, and if the intent is purely about deficit reduction why is this change not for a limited duration?

And you still haven't explained exactly how this helps the young, that your case is predicated on.

bilbo51

I was mystified as to what the "rules of politics" were...

So I googled it.

http://htspweb.co.uk/garbagegate/item2/rules.htm

Ripoff_2

DavidHayton wrote: »

Well I didn't expect to be popular when I posted my comment!
Of course it is about deficit reduction. Everyone knows this but the rules of politics means that it can't be admitted.

David, this is NOT about deficit reduction. If it were then it would not be permanent, because at some point the deficit will be reduced, it's not about making the public sector pensions better for your children either.

It's actually about making the Public Sector easier to privatise. Along with changes to increase member contributions, increase retirement age, this change makes the public sector more attractive to investors. Wait till the dust settles and you will see this coalition offer vast sections of the public sector to the boys in the city. The pension changes are the major hurdle to sell off’s and the Tory party have form on this.

Remember the privatisation in the 1980's of BT, BA, BG etc the ex public sector, well this is what will happen again. But you see the Tories have learnt from that, last time the pension rights were kept but this time they are changing them to make sure the Public Sector is easier to sell.

You see if this was about deficit reduction then they would have made sure that the old 1980's privatised companies were not hit by this change, because I don't know if you are aware that BT, BA etc are private pensioners but are being hit by this change due to the original linking to the public sector.

Therefore, any private pensioner savings are not going back to the treasury but to the employers and shareholders, nothing what so ever to do with deficit reduction. It's the Tories giving money back to their friends in the city at many private pensioners expense.

You see David, your children and my grandchildren will be worse off by this change, they will have worse pensions in the future. This is a drive to the bottom of pension provision, the private sector pensions are poor and all this does is make all pensions even poorer.

Your children and my grandchildren will actually suffer far more with this change and when they come to retire, it will them that will be asking the question of us "Why did we allow them to get away with this".

cvd

This article is interesting:

http://www.bllaw.co.uk/pdf.aspx?page=19018

You may get RPI or you may get CPI for pensions in payment. You may get RPI or you may get CPI for the revaluation of deferred pensions. It all depends on the precise words used by the person who drafted the rules. The intent is unimportant and the promises made are unimportant. I guess that must be one of the "rules of politics".

teacher_retired

DavidHayton wrote: »

Well I thought that the switch from RPI to CPI was a great idea.

How else would the government have ensured that those already in retirement take their share of the pain. About every other change being proposed hits the young disproportionately and spares the old. Our children are our future and we rip them off at our peril.

I am not being ironic, and I'm a public sector worker in a final salary scheme so this will hit me eventually as well.

David

I found this a rather sad comment.
Do you not realise that you and your children will grow old and some will need a pension to live out their years with a reasonable standard of living?
This is a permanent change not a temporary measure to be replaced when the current financial crisis is over.
We are talking about all state pensions which include many on really low incomes.
Read again the wording of EDM1032.
Is it really so unreasonable to ask that the issue be debated properly?

Interested_Taxpayer

FDA, Prospect, CSPA and the Police Federation have jointly asked lawyers to write to Osborne and to IDS giving them warning of a possible claim for a judicial review into the move to the CPI.
Limited chance of success perhaps but an interesting angle to come from nonetheless and certainly worth a go.
Information about those who have bought added years and possible legal action to follow.

www.fda.org.uk/MembersArea/News/Newsletters/Pensions-update-3-March-2011.aspx

BoxerfanUK

DavidHayton wrote: »

Because the country is seriously broke. I don't think that they would be going from RPI to CPI if it cost money. All this nonsense about "better measures of inflation" is baloney, but because it can't be proved that it is boloney, politicians can hide behind it.



The government has decided that money needs to be saved. Off the top of my head, I can think of four ways of doing it:
(1) Increase pension contributions for those paying into the scheme (6.4% to 9.?% has been mooted).
(2) Increase the age at which the benefits of future contributions can be taken (is it 65, or 67, or ??)
(3) Change the benefits payable for each year's contributions (heck, if we aren't going to retire until 68 then we can change the scheme from an 80ths scheme to a 90th's scheme).
(4) Change the index from RPI to CPI

Now consider three people
(a) Alan the pensioner. He is not affected at all by (1) - (3), only (4).
(b) Billy the 42-year old. He will be affected by (1) - (3), but only on his future contributions. He is affected by (4)
(c) Charlie the 18-year old. All his contributions are affected by (1) - (3). he is affected by (4).

Now if idea (4) gets thrown out, then it will cost money, and that money will have to come from somewhere else. You may then well find that even more emphasis is placed on (1) - (3), with a further transfer of wealth from Charlie to Alan.

Sorry folks, I thought that the change from RPI to CPI was a masterstroke. How else could the current pensioners join in the pain? Because we are all in this together, you know!

David

Seriously broke indeed, the gov't afford what they want and can't afford what they don't want and you fall for it every time.

Interested_Taxpayer

DavidHayton wrote: »

Now consider three people
(a) Alan the pensioner. He is not affected at all by (1) - (3), only (4).
(b) Billy the 42-year old. He will be affected by (1) - (3), but only on his future contributions. He is affected by (4)
(c) Charlie the 18-year old. All his contributions are affected by (1) - (3). he is affected by (4).

Sorry folks, I thought that the change from RPI to CPI was a masterstroke. How else could the current pensioners join in the pain? Because we are all in this together, you know!

David

David
Alan the pensioner has no choice in the matter as he is retired and in pension payment. The other two have choices as they are younger and in work. They therefore have the time and have the options to provide for their eventual retirement.