Jane Kola comments in City A.M. on Barnardo’s losing its legal battle to shift its pension indexation
The Supreme Court ruled yesterday that children’s charity Barnardo’s can not change the index it uses to protect pensions from inflation.
In a unanimous verdict judges ruled the charity may not switch the measure of inflation used on its pension scheme from the retail prices index (RPI) to the consumer prices index (CPI). The move to the CPI, a cheaper measure of inflation, would have enabled a reduction of the scheme’s deficit.
Jane Kola said that while the ruling marks the end of the road for Barnardo’s, it may not impact other schemes.
“The decision confirms that the index to be used to increase benefits in both deferment and in retirement depends on the exact wording of scheme rules as they apply to members,” she said.
Jane added: “There is no ‘hard and fast rule’ that schemes can or can’t change their index. Schemes need to ensure that they have looked at all of their rules, not just the last set.”
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