15% cut in public sector pensions – Court upholds switch from RPI to CPI

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THE GMB is ‘dismayed’ by the court decision to uphold the government’s switch to CPI indexation from the RPI, cutting public sector pensions by 15%.

Unions say it is not right, and the GMB, with other unions, will be considering the grounds for appeal against this decision

Brian Strutton, GMB National Secretary for Public Services, said: ‘When the government announced out-of-the-blue in 2010 that it was downgrading the annual uprating of public sector pensions from RPI to CPI the GMB and other unions challenged the legality in the courts.

‘How could it be right that pensions already being paid could be reduced by around 15% in value just at the whim of the government?

‘Unfortunately, the courts seem to take the view that the government can do what it likes even if this amounts to taking money off pensioners just because they used to work in the public sector. It’s not right, and together with the other unions we will be considering the grounds for appeal.’

The appeal was brought by PCS, POA, FBU, NASUWT, Unite and Unison.

The switch in the measure used to increase public sector pensions annually also impacts on private sector schemes which do not have the RPI indexation written into their rules.

The unions mounted the legal challenge on behalf of millions of public sector workers after the switch – effective from next month – was announced by chancellor George Osborne in his 2010 budget without consultation or negotiation.

CPI is around 1.2% lower on average than RPI, but is estimated to widen to 1.4% according to the Office of Budget Responsibility, meaning the loss to existing public sector pensioners will be over 15% in the future.

The unions are now considering their next steps.

l Unite’s NHS members will be staging protests on Wednesday 28 March, after they overwhelmingly rejected the government’s pension plans for the NHS.

The London NUT, the UCU and the RMT Fleet Auxiliary will be taking strike action on that day.

Unite’s members will be continuing their campaign against the government’s proposals, after they voted by a margin of over 94 per cent to reject the pensions package.

Unite’s consultative ballot of its 100,000 NHS members announced yesterday, came out strongly against the proposals which will see them having to pay more, work longer and receive less.

Over 94 per cent of Unite’s members voted for rejection on a turn-out of 25 per cent.

Unite’s general secretary Len McCluskey said: ‘This emphatic rejection of the proposals should send a clear signal to ministers that they need to return to the negotiating table for genuine and meaningful talks.

‘The idea of a nurse or paramedic lifting patients at the age of 68 is unacceptable.

‘Members will be taking their message out to their workplaces and communities on 28 March and we will continue to work with other unions on taking the campaign into the spring and beyond.’