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Pension News

Comment or Reports from GMB on news and events affecting your Pension.

Pensions, your pay when you retire!

Pensions News & Events

July 2020

Government U-Turn on Public Sector Pension Cap

In a victory for GMB Public Sector Members and their campaign against the Chancellor of the Exchequer's public sector pension cap, the government have made a U-Turn in Policy.

READ THE FULL NATIONAL PUBLIC SECTOR BULLETIN HERE:

READ THE DETAILED PENSIONS TEAM UPDATE HERE:

GMB's PRESS STATEMENT

Date: 13/05/2020

Rehana Azam, GMB National Secretary for Public Services, has written to Rishi Sunak the Chancellor of the Exchequer, in response to leaked documents from the treasury, detailing proposals for a public sector pay freeze, and a return to the policies of Austerity.

She gave voice to our 300,000+ public sector members' strong and united opposition to any return to austerity, putting the Chancellor on notice that GMB will fight cuts to pay across the Public Services.

READ & SHARE THE LETTER HERE

June 2020

GOVERNMENT EXCEEDED ITS POWERS” IN ATTEMPTING TO DETERMINE PENSIONS INVESTMENTS

Following a lengthy legal battle that reached the Supreme Court, the Palestine Solidarity Campaign have won their Judicial Review (JR) of the Governments decision not to allow Local Government Pension funds to act contrary to government foreign policy.

The government introduced the policy in response to the growing Boycott, Divestment and Sanctions (BDS) movement that was increasingly asking those pensions funds to divest from the state of Israel.

The Supreme Court has determined that the government acted beyond their powers in attempting to impose such a policy.

It was thought that the BDS tactics may have conflicted with the fiduciary duty of the funds to maximise returns for their members; the judgement still allows for divestment decisions to be made on a financial rather than a political basis.

The decision is important as it restores the freedom Local Government Pension Funds have over what they invest or don’t invest in and we may see further activity in future as a result.

With that in mind, colleagues will be aware that GMB Congress policy is not to support or adopt any policy that may directly or indirectly undermine GMB membersjobs.

A summary of the judgement can be found here http://lgpsboard.org/images/Guidance/SAB_SCSN062020.pdf

 

Nothing is more important that a decent pension in retirement

Pensions are your pay when you retire!

 

GEORGE GEORGIOU, National Pensions Organiser, GMB, Mary Turner House,

22 Stephenson Way, London, NW1 2HD

george.georgiou@gmb.org.uk

 

April 2020

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The GMB alongside Fire Brigades Union (FBU) and other unions has filed court proceedings over the government’s withholding of improved pension benefits from hundreds of thousands of public service workers. 

The joint unions say that the government is in breach of a key part of the new public service pension schemes which came into force in April 2015 under the Coalition Government. 

The regulations for the pension schemes require four yearly actuarial valuation of the schemes and if these valuations show the cost to the government has increased or dropped beyond its own predetermined level, then the employee benefits must be reduced or improved accordingly.  

The latest valuations which took place last year demonstrated that scheme costs were below this predetermined level and that from April 2019 benefits should have been improved and contributions decreased.  

However, in January 2019 the government “paused” the process pending the outcome of an earlier age discrimination case (the 'McCloud' Judgement) that the Government lost. The GMB in response to this launched a campaign calling for the benefits to be paid out immediately details here:

Tell Rishi Sunak to stop the Public Sector Pension Swindle!

SIGN THE PETITION!

GMB consider the delay to be contrary to the scheme rules and are concerned that the government seeks to pass the cost of McCloud judgement to scheme members. 

The claim filed by the Trade Unions, including the FBU and GMB, seeks to force the government to lift the pause and improve employee benefits in line with their own regulations and earlier negotiations.  GMB issued separate sector bulletins at this time details of sector specific bulleting can be found at

The outcome of the proceedings could affect those in the new public sector pension schemes including workers in local government, civil servants, NHS, teachers, armed forces, police and firefighters. 

Rehana Azam, GMB National Secretary for Public Services, said: 

“We are so disappointed to have to resort to taking legal action against this government on an issue that has been so recently agreed.

The regulations regarding the new public sector pension schemes were imposed by the government after lengthy negotiation and clearly state that surpluses must be redistributed in the form of improved member benefits or reduced contributions (following discussions at the appropriate Scheme Advisory Boards) just as they say that losses must be taken on board by the members.

In the first valuation following the new process a surplus has been shown and the government have simply ignored it despite numerous requests. They continue to hide behind the McCloud judgement and we therefore felt that we had no option but to pursue a Judicial Review.

The reduced contributions and improved benefits that the surpluses should bring about will go some way to addressing the years of austerity that public sector workers have had to face. 

We are pleased to have the support of our fellow unions POA, PCS, and FBU and we are determined to see justice prevail.”

George Georgiou - National Pensions Officer

 

March 2020

Public Sector Pension Cost Cap

As part of the public sector pension reforms in 2015 a cost control mechanism was introduced across public sector pension schemes. It is referred to as the Cost Cap Mechanism. It has a ‘floor’ and ‘ceiling’.

If the ‘floor’ is breached it would bring about better benefits and if the ‘ceiling’ was breached the scheme would cost more.

The first valuations of the pension schemes took place recently and it has been found that across Local Government, the NHS and Civil Service Pension Schemes the floor has been breached.

This means that in: Local government there is an excess 1.2% to spend on improving benefits/reducing contributions.

Local Government Details

The NHS there is an excess 3.2% to spend on improving benefits/reducing contributions.

NHS Full Details

The Civil service there is an excess 5.4% to spend on improving benefits/reducing contributions.

Civil Service Full Details

The above benefits if approved were to be realised in April 2019 but because of a pension challenge the government announced a pause to the drawdown of any benefits from the surplus of funding. We do not consider that such a pause is allowed for in the Pension Scheme Regulations.

The GMB has made strong representations at the highest levels of government asking them not to pause the drawdown of the benefits and to continue with the process that would benefit our members.

George Georiou - National Pensions Officer

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January 2020

Dear Member, BT has lost a legal bid to make changes to its pension scheme. The court of appeal dismissed the company’s request to change the way it calculates pension increases. If BT had been successful – over 80,000 members of the scheme stood to lose an estimated £24,000 in future pension benefits. BT sought a ruling on whether it could change the index used to calculate pension increases paid to “section C” members of its defined benefit pension scheme. It currently uses the retail prices index (RPI), but believes the rules allow a switch to another index in certain circumstances. Sections A and B of the scheme are linked to the consumer price index (CPI). CPI is generally lower than RPI, which is an index no longer widely used in government – prompting BT to argue that it had become inappropriate for increasing pensions. The high court decided in January 2018 that it was not possible to change to another index, and the court of appeal has now upheld that decision. This case was about protecting the pension increases members were entitled to and GMB welcomes the High Court Judgement. This important decision could be relevant for any pension schemes that use RPI to increase members’ benefits. Contact me for further information.

George Georiou - National Pensions Officer

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July 2018

IMPORTANT HIGH COURT RULING FOR PENSIONS SCHEMES LINKED TO INFLATION

Most pension schemes provide for an increase in pensions in line with inflation. Generally speaking RPI is the preferred measure for members because it takes housing costs into account whereas CPI does not – see below:

In a recent legal case, the High Court turned down an attempt by the British Telecom (BT) Pension Scheme to switch from the Retail Prices Index (RPI) inflation to the generally lower Consumer Price Index (CPI) as the judge decided that RPI had not become inappropriate in the context of the BT pension schemes rules. BT has been granted leave to appeal and expects the appeal to be heard within the next 12 months.

GMB Comment

It remains the case that the ability to switch pension increases from RPI to CPI will depend on the specific wording of a scheme's rules. What is vital is that GMB members, Reps and Officers are vigilant. Where pension scheme trustees are asked to consider agreeing to switch from RPI to CPI, they should seek advice from GMB’s Pensions Department. This case may be helpful in terms of giving the trustees guidance on the factors to take into account and in deciding whether not to do so.

Members should check how their pension scheme calculates annual increases and ensure scheme rules are adhered to.

In the mean time any queries can be sent to the GMB National Pensions Organiser, George Georgiou.

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