A group of Hewlett Packard (HP) pensioners are asking the government to make a change in the law to close a legal loophole, which allows the company not to index link part of their pension to inflation.

As a result, the group are asking the Prime Minister and Pensions Minister to tighten up the law forcing the employers concerned - mainly US-based multinationals - to pay the increases in the future.

Under UK law, any defined benefit scheme pension built up after 6 April 1997 must be increased in line with the consumer prices index (CPI) or 5 per cent, whichever is lower, and any pension built up after 6 April 2005 is increased in line with the CPI or 2.5 per cent, whichever is lower. But increases to pensions built up before 1997 are at the discretion of the employer with no legal obligation to pay, although most companies do.

The campaigning pensioners were all originally employed by Digital Equipment Company, the UK subsidiary of the Digital Equipment Corporation (DEC), a major US computer firm. Many of them joined in the 1980s and 90s. DEC was taken over by Compaq in 1997, and then Compaq was acquired by the US giant HP in 2002.

HP also took over the Digital pension plan and, while the plan members believed that the discretionary increases they had been receiving each year from Digital and then Compaq would continue, HP decided not to pay them unless it was legally obliged to. Around 100,000 pensioners are affected by the loophole, with the HP Pensioners Association representing 3,500 pensioners who have each lost on average in excess of £24,000.

Last week, a rallying event took place at the House of Commons, attended by representatives of the HP Pensions Group and MPs. They have now written to the Pensions Minister Guy Opperman calling on him, and PM Theresa May, to honour her pre-election promises to tighten up on pension scheme abuse, change the law and prevent ‘bad behaviour' by businesses in the future.

A spokesperson for the campaign, Julian Russell said: “The meeting last week was well supported by MPs from across party lines, by members of the press, and by our own members as well as members from other large pension schemes which behave as badly as Hewlett Packard Enterprises. Our next step will be to seek a face-to-face meeting with the Minister for Pensions and Financial Inclusion, Guy Opperman MP when we shall be asking him to confirm that the commitment made in the Conservative party's election manifesto, and the Prime Minister's pledge to ‘protect the pensions of ordinary people from the actions of unscrupulous company bosses’ - that this means us!

“Both the former and present Pensions Ministers have indicated that they regard our ex-employer's actions to be ‘morally unacceptable’ so we are expecting a positive response to this. We are also asking him to explain what specific measures his department is proposing to take in order to curtail and prevent "bad behaviour" of this type in the future. Finally we are asking him to give us his undertaking that he will introduce appropriate measures in the forthcoming White Paper to extend the future powers of The Pensions Regulator in order to prevent the unreasonable withholding of discretionary increases that have previously been promised to the employees.”

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