Dear XXXXXX Date
MP for XXXXXXXXXXXXX
I write to seek your support for our campaign to achieve fair annual cost of living increases for elderly pensioners whose incomes are hugely impacted by inflation. These are the thousands of members of UK defined benefit (DB) company pension schemes who receive no or only limited cost of living increases on their pensions earned before 1997.
You will be aware of the debate on DB schemes in Parliament on 17 January and the evidence submitted by pensioner action groups to the Works and Pensions Committee last October. The predicament of BP, HP and other pensioners highlighted on both occasions resonates with the parlous situation faced for many years by members of the two Reuters UK final salary pension schemes.
I am a member of the Reuters Pension Review Group (PRG), formed by Reuters DB pensioners to lobby their sponsoring company and their pension fund trustees for a fair deal on inflation-linked annual increases. There are two schemes, The Reuters Pension Fund (RPF) and the Reuters Supplementary Pension Scheme (SPS) with a membership of nearly 7,000.
The PRG was established in 2004, two years after Reuters stopped paying annual inflation increases to its DB pensioners on pre-1997 service. The rules of the two funds allowed the company to use its discretion on annual increases, and it decided there was no money to increase pre-97 pensions. Inflation increases had traditionally been awarded before 2003, notwithstanding the discretion rule.
At the time, most FTSE 100 companies had rules obliging them to pay annual inflation increases. The 1995 pensions act brought in obligatory inflation increases, but only on pensions earned after 1997. Older Reuters pensioners earned all or most of their pensions before 1997 and we calculate our pre-97 pensions would need a 47.9% increase to reinstate their 2003 value.
PRG conducted several campaigns against the inequity of zero CoL increases pre-97. We finally won a 10-year deal in 2012, later extended by three more years, for a maximum 2.5% annual increase in pre-97 pensions. This has just run out and we have no guarantee the fund trustees will reach a new deal with the sponsoring company. The situation is not helped by three changes of company sponsor over the period, our present one being The London Stock Exchange.
I attach a link to the PRG website for your information. https://reuterspensioners.org.uk
Yours sincerely,