Indexation and revaluation of pensions—changing from RPI to CPI
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Indexation and revaluation of pensions—changing from RPI to CPI

The following Pensions practice note produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Indexation and revaluation of pensions—changing from RPI to CPI
  • Implementation of the move from RPI to CPI
  • How was the move from RPI to CPI legally achieved?
  • Which benefits are affected?
  • No CPI underpin
  • Are the CPI changes overriding?
  • Other affected areas
  • Increases to GMPs
  • Compensation paid by the Pension Protection Fund (PPF) and the Financial Assistance Scheme (FAS)
  • Public sector schemes
  • More...

FORTHCOMING DEVELOPMENT: The Trustees of the BT Pension Scheme, Ford Pension Schemes and Marks and Spencer Pension Scheme have announced that following their joint application the court has granted an extension of time in which to consider a potential application for a judicial review of the decision to align the Retail Prices Index (RPI) with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) from 2030.

The government had announced on 25 November 2020 that RPI is to be aligned with CPIH in order to address its statistical shortcomings. However, the Chancellor of the Exchequer exercised his power to postpone implementation of the change until February 2030, when the final specific index-linked gilt will mature.

For further information, see: BT Pension Scheme: News, LNB News 01/02/2021 4 and News Analysis: Reform to the RPI Methodology—change is coming for pension schemes and savers.

THIS PRACTICE NOTE APPLIES TO OCCUPATIONAL PENSION SCHEMES

Subject to certain exceptions, legislation requires occupational pension schemes to increase pensions in payment (commonly known as indexation) and revalue deferred pension rights (commonly known as revaluation) by a specified minimum level each year. This is to provide a measure of inflation protection in relation to those pension rights.

Up until 31 December 2010, the statutory minimum indexation and revaluation level was determined by reference to the Retail Price Index (RPI), subject in

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