A couple of bits and pieces this week to blog about. First the recent decision of the European Court of Human Rights dismissing an appeal by expat pensioners that they had been discriminated against because their pensions had not been increased in the same way as pensioners who remained in the UK.
This is an extremely long running 8 year saga, originally brought by a Mrs Annette Carson, who had moved to South Africa several years ago. She and a group of other expats, argued that their UK State pension should rise with inflation each year. They failed at every court both in the UK and now in Europe. Inflation proofing does apply to some expats who happen to have retired to sunnier climes in the EU (and in the US) but not for those in South Africa, Australia and Canada. The Courts consistently agreed that although the pensioners may well have continued to pay National Insurance Contributions for some time after leaving the country, NI contributions are not exclusively linked to state pensions. In particular, since they didn’t contribute to the UK economy and paid no UK tax to help offset the increases (which could amount overall to £500 million a year), there seemed no reason to extend the inflation proofing to those pensioners.
This comes as no great surprise to those of us who have been following the story for some time. The only shame is that no one had the guts to say to the pensioners after the House of Lords and the European Court had both rejected the claim ‘Look darlings, you have no chance of success. Just give it up as a bad job and enjoy your Pina Coladas…”
Next, a return to my favourite current bugbear, NEST. The Government have just announced that the scheme will be funded by a 0.3% annual management charge plus a charge on contributions of around 2% until the costs of setting the scheme up have been met. Sneaky to say the least, and the net result will be that the low to middle earners who will be the majority of NEST members will immediately lose a significant chunk off their already meager pension savings. It is likely to take 20 years or so before the costs are recouped so a whole generation will lose out. Nice one DWP.
Jennie advises large multi-employer schemes as well as smaller single employer arrangements and has wide experience of both Defined Contribution and Defined Benefit schemes. Jennie qualified in 1986 originally as a criminal prosecutor. She sits as a Magistrate in her local justice area and is an Approved Chairman and Deputy Chair of the Bench Training and Development Committee. Jennie was formerly Legal Director of the Occupational Pensions Regulatory Authority. When her busy practice allows, Jennie likes to indulge her passion for travelling. To consult Jennie on any corporate Pensions matter, please call her on +44 (0)20 7749 2700 or send her an email by clicking below: