Dear Brother/Sister
Previous circulars have outlined the significance of the intention by the Treasury to set 'cost ceilings' for each public sector pension scheme. We have stated that these could set a financial 'straight jacket' for discussions around pensions. We have raised these concerns with various ministers, explaining our view that setting these without firstly considering other issues would clearly undermine the legitimacy of any discussions. For example, we explained that issues such as the proposals regarding retirement age and other factors would significantly influence the cost of any pension scheme and should be considered before any costing by Government actuaries.
The Chief Secretary to the Treasury, Danny Alexander, wrote to the TUC last Friday, outlining the latest Government position. This included setting cost ceilings for the:
- Local Government Pension Scheme.
- NHS Pension Scheme.
- Principal Civil Service Pension Scheme.
- Teachers' Pension Scheme.
Significantly, the letter stated that cost ceilings for the Firefighters' scheme would not be set until later in the autumn. The Union had sought such a delay in previous correspondence and discussion.
Meeting with CLG Minister
The Union subsequently met CLG Fire Minister, Bob Neill, again on Monday 10 October. We formally presented a number of further documents from the FBU. These will be made available to members shortly.
We outlined the various aspects of our argument and explained the supporting evidence. He agreed to consider all of these in detail, including through joint discussions assisted by actuaries from each side. Our actuaries have already begun to carry out detailed assessment of the cost and other arguments presented so far by CLG.
He stated that the delay in setting the cost ceiling for the Fire Service scheme would allow a more detailed discussion of the arguments and evidence put forward by the Union.
These issues have now been developed further through a subsequent meeting involving actuaries from both sides. These discussions are continuing.
RPI/CPI: Judicial Review 25 October
You will recall that the FBU, together with five other Unions, is challenging the Government over their decision to change the uprating mechanism for pensions from the Retail Price Index (RPI) to the Consumer Price Index (CPI). This measure is estimated to reduce the value of pensions by approximately 15% over 20 years. Our judicial review is now scheduled for a hearing at the High Court starting on 25 October.
The Executive Council continues to meet regularly to consider these and all related matters and will issue further reports as discussions progress.
Best wishes.
Yours fraternally,
Matt Wrack
General Secretary
2011HOCO508MW
