BT Pension Scheme Review: Help please.

Worried_pensioner wrote: »

What a difference a month can make while the information was posted in April .BT has now decided to challenge the ruling in the high court . They essentially want to get the ruling overturned. I would encourage all section B members who will be affected to get involved.

If like me you are a section B member, then you have been on CPI for some considerable time, it is section C members who are affected by this.

If like me you are a section B member, then you have been on CPI for some considerable time, it is section C members who are affected by this.

This latest challenge is specifically related to GMP - see link in post above which contains a link to the govt decision in respect of public service schemes.

fwor wrote: »

Looks like BT want it both ways, don't they? When the government makes a change that allows them to chop their indexing from RPI to CPI (CPI being a completely inappropriate "artificially modified" index for the purpose) they grab it with unseemly haste.

But when the government makes a change that's not to the advantage of their senior management's bonuses, they immediately start moaning.

This is incorrect, paying full increases on GMP is a retrospective liability being imposed, and wasn't foreseeable. As greenglide says, on this issue it's the government that has backed out of previous promises, not the scheme.

fwor wrote: »

So are you saying that Worried Pensioner has no reason to be worried?

Note also that I didn't say that it was or wasn't a retrospective liability. All I said was that it's likely to be detrimental to BT senior managements' bonuses - which I believe is correct, or they wouldn't be whining about it.

I was replying to your rhetoric about supposedly nefarious BT. In this case, it isn't BT that have reneged on promises, but the government.

Technically public sector schemes were always on the hook for when a member with GMP didn't get full CPI increases with their state pension (e.g., if someone deferred it, or moved overseas to a country where the UK government doesn't inflation proof state pensions). However, this was always a very small minority of cases before 2015, when the mechanism for new state pensions effectively giving increases on a GMP was removed as part of the single tier reform.

The reason this doesn't affect most private sector scheme members is contingent on the fact their GMP has 'revalued' (i.e. increased between leaving and GMP age) at a faster rate than the public sector scheme method. This means most private sector scheme members have had their full GMP increases in payment effectively 'front loaded' - the system worked so that the state pension would pay no more (but no less) than what you would have got had you contracted-in, after the GMP paid through your work pension was netted off. So, if your revalued GMP was (is) way bigger than your hypothetical SERPS, you'd keep the outsized GMP but not get any increases on it through the state pension as well.

The problem with public sector schemes (and private sector ones that revalue GMP in the same way) is that the revalued GMP basically matches the SERPS you would have had, had you contracted in, so increases through the state pension were typically effective immediately.

I didn't say that it was nefarious.

What I was pointing out is that when there's a government-initiated change that's not within their control (RPI > CPI) which is to their advantage, they happily take it. No consultation about the negative impact on their pensioners - just done and dusted within a couple of weeks.

And when there's a government-initiated change that's also not within their control (GMP increases) but which is to their financial disadvantage, they immediately moan about it and try to get it reversed.

You didn't answer my question: are you saying that Worried Pensioner has nothing to worry about, then? If he's one of the people in the age range involved, are you saying that there will be no negative impact on his pension at all, compared to what he could have expected when planning his retirement?