One week it’s the turn of the public sector and the next week it’s the private sector being told that CPI (the Consumer Prices Index), instead of RPI (the Retail Prices Index) will be used to calculate minimum:
(i) revaluation of pensions in deferment up to retirement age; and
(ii) indexation of pensions in payment.
But what does that mean in practice?
It’s the law of unintended consequences for many. For those pension schemes that have RPI hard-wired into their rules the implication is that members will receive the better of the two – one to comply with the rules, the other to comply with statute. Surely this cannot be intended? The policy seems to have been introduced to ease funding burdens, not increase them.