It was Mark Twain who was forced to protest that the reports of his death had been exaggerated. Although the terminal decline of the final salary pension scheme has been solemnly predicted for some time, for those of us involved in pensions this year it has felt more like a high fever than a long goodbye.
Archive for the ‘Benefit changes’ Category
Pension schemes in 2010: what kind of year has it been?
Thursday, 30 December 2010Dear Government and the Courts: My Christmas pensions wish list
Tuesday, 21 December 2010Written your letter to Santa yet? I absolutely love the glitter and sparkliness of this time of year, complete with a bauble-tastic Christmas tree and my usual immoderate approach to tinsel. However the pensions industry is wrestling with the switch from RPI to CPI, the holes in the section 251 surplus regime and the treatment of Pensions Regulator orders against Nortel and Lehman Brothers, while guaranteed minimum pensions just won’t go away. So what should we be asking the DWP and HMRC for on the pensions front this year? Being a pensions lawyer to the core, my letter to Father Christmas has some unusual wishes…
RPI/CPI indexation for pensions – the ASB and the butterfly effect
Thursday, 11 November 2010
Chaos theory tells us that a single occurrence, no matter how small, can change the course of the universe. That might be overstating the case a bit, but it won’t come as news to you that changing from the Retail Prices Index to the Consumer Prices Index as the measurement index for calculating revaluation of deferred pensions and increases to pensions in payment is going to be a bit of a mess. Däna Burstow posted some comments here recently on the potential for the change to create gaps even between different sections of a single pension scheme, based on the wording of scheme rules which were never drafted with this type of change in mind. (more…)
Lord Hutton, Steve Webb and Alan Rubenstein at the NAPF Conference 2010: What did we learn?
Friday, 8 October 2010
Well, the curtain is just about down on the 2010 NAPF Conference here in Liverpool. Along with the rest of the delegates, pensions partner Neil Bowden and I have seen the great and the good of the pensions world over the last few days and picked up some recurring themes along the way, both inside and outside the conference hall. The future of private sector pensions, the thorny question of pension indexation, and the regulatory hot potato of enhanced transfer values all featured.
RPI/CPI indexation for pensions – Oh what a mess!
Friday, 6 August 2010One 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.
