Six unions have mounted a legal challenge on behalf of millions of public sector workers over what inflation index is used to increase their pensions.
A judicial review hearing starts in the High Court on Tuesday (25th) to challenge the switch to using the consumer price index (CPI) instead of the traditionally-higher retail price index (RPI) for the annual increase in public sector pensions.
There will be a demonstration in support of the judicial review outside the Royal Courts of Justice, Strand, London WC2A 2LL, from 8.30am to 10am on Tuesday 25 October.
he move – effective from April this year – was announced by chancellor George Osborne in the June 2010 budget, without any consultation or negotiation.
The government claims CPI is the more appropriate index, but the unions have always contended the change was a deficit reduction measure.
As part of the ongoing talks over wider cuts to public sector pensions, ministers have since ruled out any negotiations on the issue.
The government must review pensions and benefits each year against increases in prices and uprate them by at least the same percentage. September’s inflation figures put CPI at 5.2% and RPI at 5.6%.
Because CPI is around 1.2% lower on average than RPI, the loss to existing public sector pensioners will be around 15%.
It is already affecting staff currently paying into career average schemes whose pension pots are revalued annually and will be smaller when they retire.
The switch has also been applied to many private sector pensions, wiping an estimated £75 billion off their value. Some estimates put the figure even higher.
The unions’ case is that the imposed move was not permitted under social security legislation, and that it reneges on assurances given by successive governments that RPI would apply.
The six unions are the Fire Brigades’ Union, teachers’ union NASUWT, Prison Officers Association, Public and Commercial Services union, UNISON and Unite.
