RJW in major Judicial Review on public sector pensions

• Unions, Federations & Charities

25 October 2011

Edward Cooper, head of the employment department at Russell Jones & Walker, is today in the High Court representing nine major membership organisations who represent public sector workers, in a Judicial Review of the Secretary of State for Work & Pensions and the Treasury's decision to change the way that public sector pensions are uprated.

The outcome of the decision will have significant implications for most public sector workers, the police and the armed forces, pensioners in those sectors and many of those receiving state benefits.

The challenge, which was filed on 18th April in the Administrative court, was initially brought by the Police Federation/Staff Side of the Police Negotiating Board, the trades unions FDA, GMB and Prospect, and pensioner organisations the Civil Service Pensioners' Alliance (CSPA) and the National Association of Retired Police Officers. Additional parties have been added today, namely the National Union of Teachers, the National Federation of Occupational Pensioners and the Association of Principal Fire Officers.

Previously public sector pensions were uprated every year according to the Retail Price Index (RPI). With effect from the 4th April the Government switched the uprating so that it was linked to the Consumer Price Index (CPI).

Edward Cooper commented: "The decision to switch indexes will have a major impact on public sector workers' pensions over time. Historically the RPI has grown faster than the CPI. As a result of the change in index linking, public sector pension’s increases are expected to be 0.8-1.5% lower in each of the next five years than they would be if the RPI link were maintained. This is a very significant reduction in pension rights and it is a decision the government should not have taken lightly, yet it is one that has been made without any apparent consultation or negotiation."  

The outcome of the challenge will not only affect public sector pensions. Any other state benefits which were also previously uprated annually according to RPI under the Social Security Administration Act 1992 (section 150) but which have now switched to CPI will also be affected. (Most notably, the additional state pension which is set to change from RPI to CPI linking in 2012, would also be affected).   

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