Pension schemes and the CPI/RPI switch - what does it mean?
April 2012Pensions Alert
- The Retail Prices Index (RPI) has been replaced by the Consumer Prices Index (CPI) as the Government's measure of inflation used for determining minimum inflation-proofing for deferred
pensions and pensions in payment from occupational pension schemes.
The effect on pension schemes will generally be scheme specific and will depend on the provisions of the trust deed and rules. For example, in the recent Danks v QinetiQ Holdings Ltd case, the High Court held that the trustees had discretion as to the basis for calculating indexation and revaluation. Some schemes will continue to have RPI as the measure used for inflation-proofing, where this is required under their rules.