The Government is set to propose changes to pensions legislation which will give scheme trustees the right to switch members’ indexation measure from RPI to CPI, Money Marketing understands.
The amendment to section 67 of the Pensions Act 1995 is expected to alter legislation which currently prevents trustees changing the rules of a pension scheme without providing certain protections for members’ “subsisting rights”. This could mean that trustees will have the right, if they wish, to switch to CPI without facing legal sanctions, even if the move diminishes members’ rights.
Pinsent Masons head of strategic development for pensions Robin Ellison (pictured) criticises the Government’s “eternally depressing” approach to pensions legislation.
He says: “What is eternally depressing in the state of pensions legislation is that the DWP come up with bright ideas in isolation, instead of looking at the holistic issue of pensions. Every time you try to fix one problem, it raises 100 others. We have seen it in tax and now we have seen it with CPI. What we are looking for from DWP is a lead on a holistic pensions legislative framework, instead of this eternal fiddling.”
Pensions minister Steve Webb is expected to make an announcement at 12.30pm today, with a formal consultation document detailing proposed legislative changes due to follow shortly afterwards.