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CPI/RPI Consultation
Comments
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Thanks Chris, strange isn't it, they're up to something!I've had a look on the internal HR Pensions website in case it's only the Hermes one that's not up to date but no joy, only the same rules document is available.
Usual BT in my opinion, don't really care about Ex employees or employees really as long as the shareholders are OK, no trust or loyalty left in that company.
Looks like a contract is not really a contract anymore, it's like being in a third world country where the Government can change the rules as they think fit, we the people don't matter anymore, the trust has just been destroyed by this action between the people and state.
I see the BT unions, CWU and Connect are very silent on this, I wonder why? Both know the terms of this agreement and signed off on it, along with BT and the Trustees, so they are up to something, the silence is deafening.0 -
Thanks Chris, strange isn't it, they're up to something
One shot across the bows - email sent to HR requesting an up to date copy. Let's see what comes back.
If they say that March2009 is the latest available my second shot will be asking why. It's almost 2 years since we voted to accept the changes and 19 months since they were implemented, so the rules must have been updated by now.0 -
It will be very interesting what if anything you get back, please keep us all informed.One shot across the bows - email sent to HR requesting an up to date copy. Let's see what comes back.
If they say that March2009 is the latest available my second shot will be asking why. It's almost 2 years since we voted to accept the changes and 19 months since they were implemented, so the rules must have been updated by now.
My suspicion is that they are on a sticky wicket with anyone who left after 1st April 2009. I also suspect that people who did leave after that date have not had a letter from the Trustees yet? unless you know any different?0 -
It will be very interesting what if anything you get back, please keep us all informed.
Will do - if I do get anything, that is
My suspicion is that they are on a sticky wicket with anyone who left after 1st April 2009. I also suspect that people who did leave after that date have not had a letter from the Trustees yet? unless you know any different?
Sorry, no idea on that.0 -
Looks like a contract is not really a contract anymore, it's like being in a third world country where the Government can change the rules as they think fit, we the people don't matter anymore, the trust has just been destroyed by this action between the people and state.
What third world country did you have in mind? Congo? Burma? Do they have RPI linked pensions there?0 -
You are missing the point once again, it's about trust in the contract, not what the contract is about. If Governments can change agreed contracts at will between other parties, i.e. trustees and pensioner or PFI and Government, then any contract between any third parties would be able to be changed by the Government as they liked.What third world country did you have in mind? Congo? Burma? Do they have RPI linked pensions there?
It's like agreeing between you and a friend that you will lend him £5 and he will give you £5 back after say a year, but the Government decrees that it should be £4 thus changing the contract.
This is fundimental contract law being broken and therefore the Trust would be undermined if Governments can change contracts at will, this in effect is what this Government is doing or trying to.0 -
You are missing the point once again, it's about trust in the contract, not what the contract is about. If Governments can change agreed contracts at will between other parties, i.e. trustees and pensioner or PFI and Government, then any contract between any third parties would be able to be changed by the Government as they liked.
No I don't think so. Please check the third line of the original post "for those interested. Page 13 says there'll be no statutory override to force CPI on Trustees" i.e. the government will not be changing agreed contracts between trustee and pensioner.
If BT or anyone else chooses to change from RPI to CPI then it doesn't matter whether you trust the contract - all that matters is what the contract says and whether it allows for this.This is fundimental contract law being broken and therefore the Trust would be undermined if Governments can change contracts at will, this in effect is what this Government is doing or trying to.
Well if it is, and a court would need to decide, then it's the contract between trustee and scheme member that's at issue. What the government would like to see happen and whether you or I trust them is a red herring.
My view is that most schemes are worded to allow trustees to make these sort of changes.0 -
No I don't think so. Please check the third line of the original post "for those interested. Page 13 says there'll be no statutory override to force CPI on Trustees" i.e. the government will not be changing agreed contracts between trustee and pensioner.
If BT or anyone else chooses to change from RPI to CPI then it doesn't matter whether you trust the contract - all that matters is what the contract says and whether it allows for this.
Well if it is, and a court would need to decide, then it's the contract between trustee and scheme member that's at issue. What the government would like to see happen and whether you or I trust them is a red herring.
My view is that most schemes are worded to allow trustees to make these sort of changes.
Some private sector scheme rules are likely to say something along the lines that pensions in payment must be increased by RPI or other suitably recognised measure of inflation (probably capped to a limit that won't apply in most cases so the cap can be ignored).
The government claim using CPI is a suitable a measure of inflation (even though the impartial observers such as the staticians say it understates inflation),
If members make a legal challenge against the use of CPI then a court of law may say "well the government are saying it is suitable measure of price inflation" so it must be recognised and so the schemes can use CPI instead.
Other private sector schemes will say pensions increases in deferment are in line with statutory revaluation (using the statutory revaluation order) and pensions increase in payment at LPI (using the increase order). In both cases this means benefits no longer increase by inflation in deferment or payment but by a lower amount now used in these statutory instruments i.e CPI.
In both cases it is the goverment that have enabled the private company to renege on their contractual promises to increase benefits in line with price inflation and to provide increases below price inflation instead.
Suppose schemes said we will increase benefits by 3% fixed and the government passed a law that said 3% now should be taken to mean 2%. All schemes would then increase benefits by 2%. By your argument you would say increasing by 2% didn't break any contractual agreement. It really isn't any different to what has happened here.
OK the government haven't gone the full hog, so schemes that say we will use RPI and nothing else must stick with RPI. However my hunch is that most schemes will have some provision in case RPI was abolished.Their thinking would have been that if government replaces RPI by another index that suitably measures inflation (as opposed to an index that doesn't suitable measure inflation such as CPI) they at least know how to increase benefits. But to use that rule to increase benefits by less than inflation is simply not right and was never the intention, and you are simply wrong if you suggest that was the intention.
If you want to argue that times are so hard that the government should tear up all contractual agreements and allow private companies to tear up contractual agreements also then at least that is an argument (albeit I disagree). But please don't pretend that private scheme rules were intended to make reductions in benefit possible.I came, I saw, I melted0 -
So to use that rule to increase benefits by less than inflation is simply not right.
It's not about what the governments wants even though we can all see what they are 'signalling'.
It's not about right or wrong.
It's about the contract between trustee and scheme member - can they do this or not?0 -
It's not about what the governments wants even though we can all see what they are 'signalling'.
It's not about right or wrong.
It's about the contract between trustee and scheme member - can they do this or not?
The government can abolish all pension schemes and declare all benefits should be treated as zero and pass laws to that effect. In that case I contractually have no scheme benefit to claim from the trustees. So to that extent you are right. But it doesn't make it right. It definitely IS about right and wrong.I came, I saw, I melted0
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