Sackers comments on looking ahead to pensions white paper
Janet Brown, partner at pensions law firm Sackers, says: “Indexation is a simple enough concept, protecting members’ benefits against inflation, but its implementation in practice has become both expensive and unwieldy for many.
“Despite the inflationary measure used for assessing statutory increases having switched some years ago from RPI to CPI, many schemes remain hamstrung by their own rules from moving with the legislative times.”
She adds: “The Green Paper acknowledges that there may also be a case for suspending indexation where an employer is stressed and its scheme underfunded. This idea of so-called ‘conditional indexation’ is nothing new, but the government has yet to take the bait.”
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