The Government has confirmed it will not introduce a legislative override to allow pension sch-emes with RPI-linked inflationary increases written into their rules to switch to the CPI.
In its official response to a consultation on the impact of using the consumer prices index rather than the retail prices index to measure price increases in occupational pension schemes, the Government says members’ trust could be “severely damaged” if it handed schemes the power to change their rules.
It says: “Although the responses were split, the Government maintains the view that members’ trust in schemes and scheme rules could be severely damaged if it intervenes to give schemes the power to change rules.
“So, having considered all the views expressed in the responses, the Government does not propose to introduce a modification power to make it easier for schemes to adopt CPI as the relevant index.”
Pensions minister Steve Webb says the Government wants people to have “confidence and trust” in pensions. He says: “We have set CPI as the statutory minimum but many schemes will pay more, and we will not give schemes power to change their rules.”