Response to consultation issued June 2011
The DWP has issued response to its consultation on the impact of using CPI as the measure of price inflation on private sector occupational pension schemes. Key points include:
- The Government has rejected calls to introduce a modification power to make it simpler for schemes to adopt CPI as the relevant index.
The Government is looking at the possibility of amending the Pensions Bill to provide that a CPI underpin need not be provided where:
- a scheme reduces benefits by reference to RPI; or
- members whose pensions have been increased by reference to RPI since January 2011 are part of a bulk transfer to another scheme.
- The Government also does not intend to override scheme rules to impose CPI as the measure of price inflations.
- Amending regulations will be issued but most appropriate form of wording is still being considered.
- No action will be taken in respect of career average schemes.
- The consultation regulations will be amended so that changing scheme rules on indexation or revaluation will require consultation with affected members.