Correct me if I am wrong but most MPS pensioners over 65 won’t know exactly what separate headings constitute their pension let alone what each figure is and how it is worked out.
So, when they are informed that the “Guaranteed pension (excluding GMP) is the heading that actually gets the 4.2% rise they are not much wiser. They are then informed that there is a Pre and Post 1988 GMP along with “Reducing bonus” and “Level bonuses granted from 2012 to 2017” you would forgive them from getting a little confused but now there is another element “New level bonus granted in 2018”.
So after “good investment returns” and a “large surplus” MPS beneficiaries would be expecting to at least hold on to the same shopping basket this year as they did last year?
But wait the “Scheme Actuary has decided that a payment of £475 million should be made from the Investment Reserve to the Government by 30 September 2018.”
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The example given for a pensioner over 65 shows that the pensioner is going to have to take something out of the shopping bag this year. The example shows a pensioner on £84 will see the pension rise to £86.08 but with inflation at 3.4% to stay level they would need £86.86 so something must go out of the basket and if they pay tax then they will have to do without something else.
The cynical among us will say that during the six years that the “New level bonus granted in 2018” has to run – how many thousands will die and receive very little of the “large surplus”? It also remains unanswered as to what would happen if there is another surplus in 3 years? How would that effect the 6 years roll out of this surplus?
They talk in Parliament about their “gold plated pensions” at the same time as they take another £475 m of miners’ pensions money. With Government coffers being topped up again with pensioners money there is a clear need to look again at whether MPS beneficiaries are getting value for money.