The cap is just a red herring:
From the NATS forum:
the modeller on NATSNET DOES take the future value of the £117,600 cap into account in so far as it IGNORES RPI in it's calculations, therefore the increase in the cap is irrelevant. The reason why pre and post new pensions figures are the same is that you will be capped by the RPI+0.5 limit until you hit the £117,600 rate( at today's prices), which is when your pensionable earnings STOP DEAD and the 0.5% becomes irrelevant.
If you imagine, the most you can earn which will be pensionable is £117,600 in todays money. in about 30 years it will be worth about 300k at the prices at that time
Imagine a race with 2 runners
A and
B:
A is the NATS
imposed pensionable pay cap, currently £117,600
B is your pay
A's running speed is RPI
B's running speed is whatever RPI+x% rate we will get per annum
Provided your pay (
B) increases by a value greater than RPI,
B will catch up proportionatle to the difference. i.e, if
B was running at RPI+2% it will catch up much quicker that RPI+1%.
The curve ball is that
B can never overtake
A, so when
B eventually catches up, it will have to keep pace with
A - in effect the Cap on pensionable earnings becomes RPI (NOT RPI+0.5% those NATS snakes are proposing (?))
The modeller simply tracks the differences between the two runners and NOT how far thay have run
. Your future
pensionable pay will
never exceed the £117,600 cap (at today's prices).
At a Band 5 unit, an ATCO 2 can expect to hit the cap in about 26 years time if pay increases at 1% above RPI; 17 years if 1.5% above RPI. So
if the Bar stewards that run NATS get their way, for the next 15years pensionable pay will be limited by RPI+0.5%; a few years later salary will hit the cap and then pensionable pay will simply increase by RPI ONLY, even if NATS (or whatever we'll be renamed) decide to lift the RPI+0.5% limit
Remember the £117,600 cap was a rule that was subsequently repealed by the government which NATS elected to retain. See pensions notice 01/2006, item 11