Agony if cap doesn't fit

六月 9, 2011

When it comes to the battle over USS reform, am I alone in having "reverse worries" about the three main issues? While a move from final-salary to career-average deals (albeit with adjusted accruals) would be regrettable, and from the retail prices index to the consumer prices index even more so, it is the introduction of an indexing cap (scarcely mentioned in the press) that really worries me.

Imagine the irreversible long-term effects, in just one year, to the value of our pensions with a 5 per cent indexation cap if annual inflation was running at 26 per cent. (I remember those days like they were yesterday!)

I also find it difficult to understand why the employers should have any influence whatsoever over the administration of the USS, with the "predictable" (to be generous) Sir Andrew Cubie virtually handing total power to them. We should expect the employers to have the power to negotiate over pay and contribution levels, but they should have no right to tell us how to organise our money or run our funds. Will they be telling us next how to spend our earnings in the supermarket?

Pension contributions are not a gift: they are part of our pay. Once given, the employers (and Cubie) should butt out.

D. Nicolson, Egham, Surrey

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