Research on how private sector defined benefit pension schemes are affected by, and intend to respond to the use of CPI.
Working Paper No. 102
By Lorna Adams, Rob Warren and Alistair Kuechel
On the 8 July 2010, the Government announced its intention to use the Consumer Prices Index (CPI) as the basis for determining the statutory minimum percentage increase for revaluation and indexation of private sector occupational pensions. This research was commissioned by the Department for Work and Pensions (DWP) to explore how private sector defined benefit pension schemes are affected by, and intend to respond to that decision.
A survey was conducted among a sample of 200 private sector defined benefit pension schemes, drawn from The Pensions Regulator’s register of pension schemes. The research sought to obtain information about schemes’ existing rules in relation to indexation and revaluation and to explore whether schemes expected to make changes to their rules as a result of the announcement. It also explored whether schemes have assessed the likely impact for them of the move to CPI.