UK - The switch from RPI to CPI for pension indexation moved one step further in the legislative process yesterday after it was approved in the House of Lords.
The Social Security Benefits (Up-rating) Order was agreed in the Lords, in advance of tomorrow's Pensions Bill debate.
The order, passed by the House of Commons in February, concerns the switch from RPI to CPI index linking for state pensions and state second pensions.
It was confirmed the order would not override scheme rules where RPI was ‘hard-wired' and Labour peer Lord McKenzie stressed the need to maintain the index for accrued benefits.
"It is also very important that pensioners with accrued benefits under RPI should have those benefits maintained and that, if the choice is made to change, CPI should occur only after the CPI regulation hits the deck," he said.
The Bill's sponsor, Conservative Lord Freud did not address Liberal Democrat Lord German's request for more information on whether the switch would reduce the pressure on occupational schemes.
An impact assessment by the Department for Work and Pensions on the effects of a switch to CPI for occupational schemes produced in February however, stated that some schemes could become more sustainable as a result and liabilities could be reduced by £60.9bn ($97bn).
Lord German also called on the government to respond the Hutton Report, published last week.
"People will want to understand the government's direction of travel, both on the basic pension and on public service pensions, which I imagine are a cause of concern to many people at present," he said.
The GMP Increase Order set the increase for members' guaranteed minimum pensions accrued between 1988 and 1997 in contracted-out defined benefit schemes at 3%.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.