PENSIONS UPDATE ...
(... from Captain Mike Post) :-
'Dear All
Further to my mailing of 19 February, Professional Pensions magazine has today published an article today reporting that the trustees of the BT Pension Scheme, Ford Pension Schemes and Marks and Spencer Pension Scheme have been granted a six week extension of time to consider a legal challenge to the Government’s November 2020 decision to change the method of calculating the RPI from the present decades old method to a method which will align it with the CPIH. The CPIH is a housing-cost related version of the Consumer Prices Index (CPI). The CPI is a price index which was introduced into the UK in the late 1990s to enable the UK to join the Euro. The CPI was never designed as an index to protect against price inflation but to compare countries’ inflation rates. It is estimated that the annual increase in the CPIH will be approximately 1% lower that the annual RPI increase.
According to Professional Pensions, the court has granted an extension of time to the three pension schemes to reach a decision on requesting a judicial review of the Government’s November action. This is because the Government has asked for an extra six weeks to prepare its defence! To a non-lawyer it seems to me that if the Government has a good case, its defence should be oven-ready with all the answers.
The trustees of the three schemes have until 7 April to decide whether to file a claim against the Government.
I would imagine that one of the major points that the pension scheme trustees will be making in seeking the judicial review is that in HM Treasury’s response to the UKSA’s consultation in 2015 on “Measuring Consumer Prices: the options for change”, it signalled its continued support for RPI, noting “The Government remains committed to using RPI e.g. in existing ILGs which currently run out to 2068”. The Government told pension schemes that it was committed to the RPI in 2015 but in 2020 has decided to scrap the RPI in 2030 and to thereby default on its RPI-linked debt obligations. As I wrote in my letter to Rishi Sunak, "Who would trust a government like this?"
If I have failed to respond to any of your emails, my apologies. I try to answer all the emails that I receive.
Regards to All
Mike Post'.