You may remember, because it wasn't long ago, that the 2008 changes to the Local Government Pension Scheme included scrapping the "85 year rule" and the lump sum and increasing contributions. These changes meant a 14% saving to the Local Government employers and resolved the issue of long-term affordability. However, they are coming for us again...
From next month, our pensions will be uprated in line with the Consumer Prices Index (CPI) measure of inflation, instead of the Retail Prices Index (RPI). The CPI does not include housing costs and so is not an appropriate measure of inflation to apply to anyone who lives in a house. Or flat. Or a tent with ground rent.
This change, which may seem like a minor adjustment, will see our pensions reduced by 15% (according to Hutton).
Also, from April 2012, it is proposed that our contributions increase by a further 3.5% of salary. Prior to 2008, the contribution rate was 6%. Now it is 6.5% for someone earning between £19,000 and £32,000. From April 2012 it would be 9.5%, an increase of 58.33% on the pre-2008 rate.
Hutton also wants us to work still longer. Work longer, pay more, get less.
But the scheme is now affordable in the long term, thanks to the changes in 2008. These changes are not about our pension scheme. The ConDems (with the help of Hutton) want to plunder our pension fund to plug the gap left by the bail out of the banks.
Public sector workers, who are taking responsibility for their retirement by paying into their occupational pension schemes (and thereby reducing reliance on the state in their old age) should not be punished for the bankers' crisis.
Yet another reason to march on the 26th March!
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