Unions challenge indexation switch under human rights legislation

Unions challenging the government’s switch of inflation measures for up-rating public sector pensions in the High Court are arguing the move contravenes the Human Rights Acts.

Lawyers for the Public and Commercial Services Union - which is bringing the case with five other unions - claim the change from Retail Prices Index to Consumer Prices Index is unlawful under article one of the act.

They argue that that pension increases based on RPI can be classed as ‘property' and are therefore protected under the act.

The union said his applied both to pensions already in payment and to pension entitlements already accrued but not yet in payment.

A spokesman for the union said: "All negotiations in recent years over pensions have been based on retention of the RPI link. The switch to CPI is a retrospective cut in pension benefits, which is a breach of the Human Rights Act and social security rules, because it applies to past and future retirement income. Reforms up to now have been restricted to future benefits."

Pinsent Masons head of public sector pensions John Hanratty said the court would have to rule on some interesting and highly technical arguments which would have a knock-on effect for private sector schemes.

"Many schemes which have rules linking the increases to deferred pensions and pensions in payment have benefited from the change, in terms of reducing their deficits because the benefits they have to build up for leavers and pay out to pensioners will increase more slowly under CPI, and it will be interesting to see how the outcome of this case impacts on them," he explained.

The three-day case started yesterday and is being heard alongside Another claim, brought by the Civil Service Pensioners' Alliance (PP Online, 25 October)