Superannuation Bill

Memorandum submitted by Barry Errington (SU 42)


1. I am a 52 year old civil servant with 30 years of service working in the Government Offices for the North East. The Coalition is minded to close all Government Offices.

2. The impact of the Bill, should it receive Royal Assent, would be to impose a cap on compensation and amendment to the terms and conditions of my employment.

3. In addition to these changes the Government has announced that future pension entitlement will be linked to Consumer Price Index (CPI) rather than Retail Price Index (RPI). For a number of years I have been buying added years' service. The cost of this is based upon future entitlement (linked to RPI).


4. My personal financial planning has been based around what I thought were the terms and conditions of my employment. For example, do I need mortgage protection insurance in the event of redundancy? I decided not to take this out because I thought that under the terms of my employment I was entitled to X should I ever be made redundant. Please see Page 36 of attached Pension Choices leaflet – "What if I get made redundant". Clearly it is now too late to take out this cover.

With little prospect for further employment in a region heavily dependent on the public sector

5. On a personal level, the Bill will impose changes which will amount to a reduction of two thirds of my existing entitlement, both in reducing my pension lump sum and removing an Annual Compensation payment, by way of access to an early unreduced pension, which I had understandably factored into my future financial planning and for which I cannot now make any retrospective provision to restore. At age 52, I consider it unlikely that I might obtain a job within either the private or public sector as a ‘first choice’ of an employer in a highly competitive labour market over the coming years.

6. The purchase of added years pension was based upon assumed future benefits. These have now changed with the introduction of CPI rather than RPI. Will I be entitled to compensation on the basis of a reduced benefit?

September 2010