From 31 March 2011, the Pension Protection Fund (Revaluation Amendments) Regulations 2011 will come into force. Following this, the Pension Protection Fund (PPF) will revalue deferred members’ accrued benefits by reference to the consumer prices index (CPI) instead of the retail prices index (RPI).
The fixed component of the limited price indexation mechanism will remain at 5% or 2.5% depending on members’ periods of service.
This planned switch in indexing PPF compensation in payment will require changes to primary legislation. This will be achieved by the Pensions Bill 2011.