The courts have
ruled that pensions are deferred salary and, therefore, are protected
by contract.
Protocol 1, Article 1 of the European Convention of
Human Rights (incorporated into the Human Rights Act 1998) says:-
"Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of his
possessions except in the public interest and subject to the
conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way impair the
right of a State to enforce such laws as it deems necessary to control
the use of property in accordance with the general interest or to
secure the payment of taxes or other contributions or penalties."
The courts have ruled that pensions are "possessions" and, therefore,
enjoy the protection of the Act. This applies both to pensions already
in payment and to pension entitlements already accrued but not yet in
payment.
The major political parties have made the following commitments:
Conservative Party (Theresa May 23 June 2009
to CBI Pensions Conference)
"And one thing on which we are absolutely clear is
that accrued benefits would be protected."
On 10 September 2009 Philip Hammond repeated the commitment in similar
terms.
Liberal Democrats (Nick Clegg 23 July 2009 A
Fresh Start For Britain)
Public Sector Pensions. "We will honour all commitments which have
already been made but examine ways to keep the cost of of future
pension obligations, particularly to the higher paid, under much
tighter control."
Labour Party (Cabinet Office Briefing 31 July
2009 Q&A on Reform of the CSCS)
"We have recently completed a major reform of the Civil Service
pension arrangements and have no plans for further changes."
In a recent challenge
in the Employment Tribunal, Mr J M Wallis succeeded in his claim that
the tapering for those aged 57 to 60, of the lump sum element of the
CER terms was not objectively justified. As a result Civil Service
Pensions has instructed employers to settle grievances about the
tapering arrangements lodged by those who have already departed. If
you were affected by the tapering arrangements you might wish to see
EPN 251 and consider lodging a grievance with your employing
department.
In September
2009 the RPI was minus 1.4%, the RPIX (RPI excluding mortgage interest
payments) was 1.3% and the CPI was 1.1%.
In August 2009 average earnings (excluding bonuses) rose by 1.9% and
average earnings (including bonuses) rose by 1.6%.
The September
RPI determines the pension increase for the following April. Since the
September 2009 RPI was minus 1.4%, there will be no Civil Service
Pension increase in April 2010, nor will there be any reduction. Civil
Service Pensions will stay at 06 April 2009 levels.
The Government
is committed to raise the Basic State Pension by 2.5% from 12 April
2010. So, the BSP is expected to rise from £95.25 to £97.65 for a
single person and from £152.30 to £156.10 for a couple.
Members have
asked us "what will happen if inflation falls to zero or less in
September 2009?" The Government is publicly committed to up-rating the
basic state pension by RPI or 2.5%, whichever is the higher. There is
no such commitment for public service occupational pensions. However,
there is no provision in pension increase legislation to reduce public
service pensions. Therefore, if inflation in September 2009 is zero or
less, there will be no increase and no decrease in Civil Service
pensions in April 2010. The increase from 6 April 2009 is already
secured by virtue of the September 2008 RPI figure.
A recent report
by the Government Actuary Department showed that at the end of
2007-2008 the National Insurance Fund was in balance to the tune of
£46 billion. By the end of 2012-2013 the balance is expected to rise
to £114 billion. In January 2008 the Secretary of State for Work and
Pensions said, in a reply to a Parliamentary Question, that the cost
of increasing the basic state pension to the pension credit guarantee
level would be £21 billion in 2008-2009.
The five
long-outstanding Civil Service pension issues are:
- Widow's/widower's pensions for
life, irrespective of re-marriage or co-habitation;
- Pensions for widows/ widowers
of post retirement marriages;
- Pre-1948 service to count in
full;
- The National Insurance
Modification to be scrapped; and
- Pay-pause victims to be
recompensed.
We have been
campaigning on these issues for many years but have not yet persuaded
the politicians. We will continue to make representations on all these
issues whenever the opportunity presents itself.
We are affiliated to
the National Pensioners' Convention and we support their Pensioners'
Charter in the following terms:-
" Every man and woman on reaching state pensionable age will have the
right to:
- a basic state pension set above
the official poverty level and linked to average male earnings,
- a warm and comfortable home,
- free health care treatment
based on clinical need and an annual comprehensive health check,
- free community care and
services to assist living at home,
- free long-term care,
- free nationwide travel on all
public and local transport,
- free education, access to and
participation in leisure and cultural activities,
- goods, services and benefits
without age discrimination,
- active engagement and
consultation on national and local issues affecting older citizens,
- advocacy, dignity, respect and
fair treatment in all aspects of their lives,
As a first step
towards establishing these rights we call on the government to
implement the Pensioners' Manifesto."
One hundred years ago
the first 'pensioners' collected their state pension at the post
office. It was set at 5 shillings a week and paid to men and women on
reaching 70 years of age. Even though the pension was means-tested, it
was a tremendous advance in social policy and the first time that the
state had recognised that it had a responsibility to look after those
in old age. But today, figures show that after a century of the state
pension, pensioner poverty remains:
- In 2007/8 2.5 million
pensioners were living below the official poverty line and 600,000
pensioners were living in severe poverty;
- About two thirds of those
pensioners living in poverty are women. Up to as many as 5m do not
qualify for a full state pension because they were unable to pay the
full national insurance contributions because of caring for their
families or being in low paid employment;
- 62% of pensioner couples have
an annual income of £15,000 or less, and 45% of all single
pensioners have an annual income of £10,000 or less;
- In a recent EU survey, only
pensioners in Latvia, Spain and Cyprus were more likely to fall into
poverty than those in the UK. The Institute for Fiscal Studies
concludes that the proportion of pensioners below the poverty
threshold will remain at its current level for at least the next
decade, despite government reforms;
- A recent survey by Scottish
Widows found that 1 in 3 future pensioners will not have sufficient
income to avoid poverty when they retire. Up to 9m workers currently
have no other pension provision than that which will be provided by
the state when they retire;
- Means-tested benefits fail to
reach 1.8 million pensioners and about £2.8 billion a year remains
unclaimed.
Therefore, we support
the National Pensioners' Convention in their claim for the basic state
pension to be set above the official poverty level of £165 a week, to
be paid to all men and women and increased each year in line with
earning or the retail price index, whichever is greater.
