2nd March 2018 Rosalind Connor comments in FTAdviser on Government action expected on pensions inflation
The government is expected to address the relationship between inflation and defined benefit (DB) pension schemes in its forthcoming white paper. However, experts fear that the revolution needed to end long court battles will not be up to scratch.
In 2010 the government dropped the retail price index (RPI) as an official inflation measure, switching to the consumer price index (CPI). DB schemes can change to the CPI, as long as its won rules don’t specifically mention RPI.
Rosalind Connor argued that even in the cases where pension schemes are allowed to change the inflation measure, a lot of them won’t.
She said: “The British Airways case last year was all about a fight between the trustees and the employer about whether members should be compensated when the scheme rules automatically moved from RPI to CPI.”
Read Rosalind’s comments in FT Adviser here
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