Tony,
This is slightly longer and not as easy on the eye, but some of it might make for useful reading for you. It relates to t
he impact of using CPI as the measure of price increases on private sector occupational pension schemes – consultation on Government proposals. Not public sector, admitadly, but there are some parallels.
http://www.dwp.gov.uk/docs/cpi-priva...ltation-ia.pdf
In essence, the effect of the move from RPI to CPI is to reduce the value of private sector benefits over the next 15 years by £83 billions (8.4% more than the December estimate - maybe the DWP PUS is of the same school as the MoD PUS..?). For 2 million relevant active members of pension schemes, the reduction in their annual rate of pension
accrual is between £2,250 per year and £2,500 a year on average - in other words, they will be up to £2,500 a year worse off right now.. that is the implied drop in their remuneration. But they won't feel it until they retire - when their pensions will be up to 12% lower than would otherwise have been the case (in real terms) in 2027 and 20% lower in 2050.
The total impact is found by summing the stock and flow impacts, i.e. costs (and equal benefits) of £83.0bn. The cash flow of these impacts will be felt over many years. For regulatory purposes it is helpful to convert this to an annual equivalent. The average annual benefits in the period to 2025 are £5.7bn. Please note that this figure does not relate to the cash flows of firms or the pensions of scheme members and is provided purely and solely for illustrative purposes.
In other words, £83 billions is being transferred from pensioners to the scheme owners and shareholders. This sort of revaluation makes the savings from RAF job losses look like a drop in the Ocean. You can bet your bottom dollar that George Osborne would quite happily delete those few words, and simply insert the word 'taxpayer'. Either way, and at the risk of instigating generation warfare, it makes retirement a far less certain place for even Generation X and the I-pod Generation, let alone either or both of those compared to baby boomers.
Playing Devil's Advocate, it puts the scale of the struggle you are going to face with your campaign in context I guess.
