DWP to publish consultation on helping schemes in RPI-CPI shift

A spokesperson told schemeXpert.com it would consult on legislation to make it easier for schemes without “rule modification powers” to change to the consumer price index (CPI) from the retail price index (RPI).

“Of course, many pension schemes already have powers to make changes to their rules and it would be their decision whether to adopt CPI in the future,” the DWP said.

This could lead the Debt Management Office (DMO) to consult on the potential demand for CPI-linked gilts to match scheme’s inflation liability.

“We haven’t got any immediate plans to consult because we’re all still awaiting some clarity about the DWP’s statutory intentions; they are still thinking about that,” a DMO spokesperson said.

They added: “We’re always ready to listen to feedback from people in the market and we said that we would consult before we do any new instruments of any kind, not just CPI.”

Neil Carberry, head of pension policy at the Confederation of British Industry (CBI), said the industry body was looking to the government to ensure any legislation did not prevent schemes staying with RPI where it was beneficial for them to do so.

“Give us some clarity so when the law does change – and of course the law hasn’t changed yet – we know that schemes are certainly not worse off, and that some schemes will be in a better position”, he said.

“We welcome any commitment from the government to consult, and obviously we will judge the consultation document on its merits.”