You say CPI, I say RPI
Under the employers’ proposed changes to our USS pension scheme, pension increases (for pensions in payment) will be ‘inflation proofed’ (employers’ term) in line with increases in the Consumer Prices Index (CPI) subject to a 5% inflationary cap.
We’ll return to that 5% cap again later (and have mentioned it already before), but let’s address the CPI/RPI problem…
The use of CPI rather than RPI (the Retail Price Index) is both mean and intellectually dishonest. CPI was introduced not to reflect the lived price experience of citizens, which RPI does, but because it was believed that a price index that excluded housing was a better macro-economic planning tool (see this statement from 2003). To opt to use it as a measure in future pension increases either suggests the decision was taken in ignorance of the function of CPI as an economic tool, or in full awareness of it being not fit for any purpose other than deflating pension value.
The RPI includes mortgage interest payments, council tax and some other housing costs not included in CPI. Though increases in these things don’t count for CPI, they certainly count when you have to pay them.
- Only employers so far have been consulted, not employees. Your union thinks you should be consulted over your future.
- In a ballot of members in May this year, 96% of voting UCU members voted to reject the employers’ proposed changes, with a similar number backing UCU’s alternative proposals to share costs between employers and staff.
- £627,000 of taxpayers’ money was used to support the employers in preparing and pushing their proposals.
- Some could get up to £127,000 less in pre-tax pension income under the new proposals