NHS Pension - Can the Government Change the Rules?

GrubbyGirl_2

I am an ex nurse in receipt of an NHS pension.  The NHS pension is normally increased each year in line with the CPI in the year to September of the previous years.  Over the years the rise has been pretty miniscule, however with the cost of living increasing the CPI is also increasing.  As the Government is not committing to the triple lock on the state pension I am concerned they will seek to block a rise in the NHS pension.  I found the following on the NHSBSA web site which has made me worried that we might not get an increase next year.  

"Q. How is the amount of Pensions Increase set?

A. Pensions are reviewed annually and are increased, as appropriate, to keep pace with rises in the cost of living by the application of Pensions Increase. Increases are paid in April and reflect any rise in the rate of Consumer Price Index inflation in the 12 month period up to the end of September in the previous year. The measure by which all public sector pensions are increased is determined by the Government. All pensioners will receive notification of the rate applied within the Annual Pensioners Newsletter. "

Does this mean the government can just choose not to give pensioners an increase?  This is very worrying

Flugelhorn

they used to use the RPI but then changed it to CPI which cost us £££££ - they can certainly change the rules again, lots of muttering about his on medics forums

diystarter7

The Gov can make lots of promises it has no intention of keeping or promises very poorly though out as they wanted your vote etc.

Look at the  state pension increase promises as its not just a promise but one that is triple locked   =  you know the rest

hugheskevi

I am concerned they will seek to block a rise in the NHS pension.

The government is sovereign, so in theory can do anything it wishes, subject to commanding the confidence of the House as it can simply pass new primary legislation.

However, it is well-established that pensions are a property right and that something like unilaterally changing rules to reduce a pension, or to not increase it in line with the scheme rules under which the pension was accrued, would be interference with property rights. That would be challenged in courts, and unless primary legislation had been passed to alter the statutory position it would be a difficult challenge to defend. Retrospective primary legislation to interfere with property rights would be extremely controversial.

they used to use the RPI but then changed it to CPI which cost us £££££ - they can certainly change the rules again, lots of muttering about his on medics forums

To be precise, the obligation was to adjust pensions in line with the change in inflation, as determined by the government. The government decided CPI was a more appropriate measure of the change in prices than RPI.  So they didn't change the rules, they changed the metric. No change to scheme rules was required for this.

Look at the  state pension increase promises as its not just a promise but one that is triple locked   =  you know the rest

The state pension is a benefit and hence individuals have no possession rights over it, and thus the government can change whatever it likes.

Pat38493

hugheskevi said:

I am concerned they will seek to block a rise in the NHS pension.

The government is sovereign, so in theory can do anything it wishes, subject to commanding the confidence of the House as it can simply pass new primary legislation.

However, it is well-established that pensions are a property right and that something like unilaterally changing rules to reduce a pension, or to not increase it in line with the scheme rules under which the pension was accrued, would be interference with property rights. That would be challenged in courts, and unless primary legislation had been passed to alter the statutory position it would be a difficult challenge to defend. Retrospective primary legislation to interfere with property rights would be extremely controversial.

they used to use the RPI but then changed it to CPI which cost us £££££ - they can certainly change the rules again, lots of muttering about his on medics forums

To be precise, the obligation was to adjust pensions in line with the change in inflation, as determined by the government. The government decided CPI was a more appropriate measure of the change in prices than RPI.  So they didn't change the rules, they changed the metric. No change to scheme rules was required for this.

Look at the  state pension increase promises as its not just a promise but one that is triple locked   =  you know the rest

The state pension is a benefit and hence individuals have no possession rights over it, and thus the government can change whatever it likes.

Can you clarify your post please because it seems to be saying 2 opposite things unless in the first part where you say :

"t is well-established that pensions are a property right"

you meant

"it is well-established that pensions (except the state pension) are a property right"

Also - the point about changing the metric rather than the rules - does that in the end mean that it's a moot point - the government could change the inflation metric to make it come out to whatever they want by cherry picking the items that go into it.  I suspect this happens alredy to some extent when I compare the increase in my costs over hte last year to the official inflation rate.

calcotti

Pat38493 said:..the government could change the inflation metric to make it come out to whatever they want by cherry picking the items that go into it.  I suspect this happens alredy to some extent when I compare the increase in my costs over hte last year to the official inflation rate.

It's the ONS that decide what is used.
https://www.ons.gov.uk/economy/inflationandpriceindices/articles/whatsinthebasketofgoods70yearsofshoppinghistory/2016-07-21 (this is 5 years old but i couldn't find a more up to date narrative.

Very few people will experience a rate of inflation that exactly matches the official rate because it depends what we buy. Statistics do show however that those on lower incomes are experiencing a higher rate of inflation than the official headline rates because I higher proportion of their expenditure is on energy and food.

Andy_L

Pat38493 said:

hugheskevi said:

I am concerned they will seek to block a rise in the NHS pension.

The government is sovereign, so in theory can do anything it wishes, subject to commanding the confidence of the House as it can simply pass new primary legislation.

However, it is well-established that pensions are a property right and that something like unilaterally changing rules to reduce a pension, or to not increase it in line with the scheme rules under which the pension was accrued, would be interference with property rights. That would be challenged in courts, and unless primary legislation had been passed to alter the statutory position it would be a difficult challenge to defend. Retrospective primary legislation to interfere with property rights would be extremely controversial.

they used to use the RPI but then changed it to CPI which cost us £££££ - they can certainly change the rules again, lots of muttering about his on medics forums

To be precise, the obligation was to adjust pensions in line with the change in inflation, as determined by the government. The government decided CPI was a more appropriate measure of the change in prices than RPI.  So they didn't change the rules, they changed the metric. No change to scheme rules was required for this.

Look at the  state pension increase promises as its not just a promise but one that is triple locked   =  you know the rest

The state pension is a benefit and hence individuals have no possession rights over it, and thus the government can change whatever it likes.

Can you clarify your post please because it seems to be saying 2 opposite things unless in the first part where you say :

"t is well-established that pensions are a property right"

you meant

"it is well-established that pensions (except the state pension) are a property right"

Also - the point about changing the metric rather than the rules - does that in the end mean that it's a moot point - the government could change the inflation metric to make it come out to whatever they want by cherry picking the items that go into it.  I suspect this happens alredy to some extent when I compare the increase in my costs over hte last year to the official inflation rate.

No. The SofS has to choose a %age that they think "reflects the increase in prices" (or similar wording)  but they are obliged to act "rationally" in making that decision.

If they arbitrarily decide that 1% reflects the increase whilst ONS's "Official Statistics" are saying 10% then the Unions will have a, successful, Judicial Review and a Judge will tell the SofS to stop taking the pee.

GrubbyGirl_2

Flugelhorn said:

they used to use the RPI but then changed it to CPI which cost us £££££ - they can certainly change the rules again, lots of muttering about his on medics forums

Which forums are those?

hugheskevi

Pat38493 said:

hugheskevi said:

I am concerned they will seek to block a rise in the NHS pension.

The government is sovereign, so in theory can do anything it wishes, subject to commanding the confidence of the House as it can simply pass new primary legislation.

However, it is well-established that pensions are a property right and that something like unilaterally changing rules to reduce a pension, or to not increase it in line with the scheme rules under which the pension was accrued, would be interference with property rights. That would be challenged in courts, and unless primary legislation had been passed to alter the statutory position it would be a difficult challenge to defend. Retrospective primary legislation to interfere with property rights would be extremely controversial.

they used to use the RPI but then changed it to CPI which cost us £££££ - they can certainly change the rules again, lots of muttering about his on medics forums

To be precise, the obligation was to adjust pensions in line with the change in inflation, as determined by the government. The government decided CPI was a more appropriate measure of the change in prices than RPI.  So they didn't change the rules, they changed the metric. No change to scheme rules was required for this.

Look at the  state pension increase promises as its not just a promise but one that is triple locked   =  you know the rest

The state pension is a benefit and hence individuals have no possession rights over it, and thus the government can change whatever it likes.

Can you clarify your post please because it seems to be saying 2 opposite things unless in the first part where you say :

"It is well-established that pensions are a property right"

you meant

"it is well-established that pensions (except the state pension) are a property right"

Also - the point about changing the metric rather than the rules - does that in the end mean that it's a moot point - the government could change the inflation metric to make it come out to whatever they want by cherry picking the items that go into it.  I suspect this happens alredy to some extent when I compare the increase in my costs over hte last year to the official inflation rate.

Yes, although it may be referred to as the "State Pension" for all technical and legal purposes it is a benefit and not a pension. 

As others have said, the government has leeway to choose how to interpret what its preferred measure of inflation will be, but it must be reasonable. For example, it would almost certainly be reasonable for the government to decide that CPIH was their preferred measure of inflation rather than CPI.

Judges have traditionally been unlikely to determine that government has acted irrationally, most Judicial Reviews are won on process failures, often failures to consult properly or failure to take into account equality requirements.

Albermarle

At the end of the day a government with a working majority can largely/legally  do what it likes.
However they are constrained by wanting to stay in power at the next election, and by the fact that everything they do is criticised by the Opposition and the media.
As Winston Churchill said ' Democracy is the worst form of government, apart from all the others' 

Silvertabby

Remember that the factor used isn't just applied to pensions in payment.  It is also used as the annual revaluation of current public sector CARE pensions.  Including the civil service.......