From Professional Pensions, 8 Dec:
Professional Pensions | 08 Dec 2010 | 12:57
Steve Webb has said the government will not give private sector schemes the power to override scheme rules to shift from RPI to CPI indexation.
In a speech to the House of Commons today, Webb announced industry-wide consultation on the RPI to CPI switch but - contrary to industry expectations - said schemes whose rules specifically state RPI indexation would not be granted power to override them and move to potentially cheaper CPI indexation.
Webb also proposed the government would legislate to ensure schemes that choose to stay with RPI do not have to pay CPI in the years it is greater.
And he said schemes should consult with members about plans to change revaluation rules when they have the power to do so.
Webb said: "RPI excludes spending patterns of poorest pensioners which is why government decided to move to CPI."
The consultation sets out the government's assessment of the impact of the decision to use CPI as the measure of price increases on private sector occupational pension schemes, and seeks views on an amendment to the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006.
The consultation closes on 2 March, 2011.