Pension News
Lack of Pension increase 2010
The pensions paid from the Armed Forces Pension Scheme, along with every other public sector pension scheme (including the Parliamentary Pension Scheme) are increased annually on the first Monday in April, following the end of the previous tax year. The index used for all of those pensions (and many private pensions schemes too) is the previous September’s Headline rate of the Retail Price Index. This is laid down in legislation contained within the Pension Increase Act (1971). Last September’s Headline rate of inflation was MINUS 1.4%.
Fortunately the Finance Act of 2004 (implemented on 6th April 2006) decreed that from 6th April 2006 no pension, once in issue, is allowed to be reduced. This cemented the long held believe that if the September’s Headline rate of inflation was to ever reflect a ‘minus’ figure that public sector pensions would not be reduced to mirror that inflation rate, but would remain static at their present rate for a further 12 months. And this is what has happened this year.
The only pension to increase at all this April is the Basic State Pension. This increased by 2.5% because the Government made a commitment that throughout this Parliament the Basic State Pension would increase by either the previous September’s Headline rate of the RPI, or 2.5%, whichever was the higher. Even the SERPS and State Second Pension element of the State Pension were not increased.
This all leaves the Society with no room to make any challenge that does not reflect badly on the judgement and creditability of its Council and Staff – something that has been patiently built up over many years and not what the Council is prepared to put to unnecessary risk. In other words, there is little that either of us can do other than ‘take the hit’ and look for something more substantial next year(!).
