The Pensions and Lifetime Savings Association (PLSA) comments on the Pension Policy Institute’s briefing note on possible reforms to inflation indices.
Tiffany Tsang, Policy Lead for DB and LGPS, PLSA said: “The PPI’s figures quantify the enormous scale of the potential cost to the members of defined benefit pension schemes of aligning the Retail Price Index and Consumer Price and Housing Index and are an important contribution to the policy debate.
“RPI is a flawed measure of inflation, but plans to phase it out must take into consideration the £60-80 billion impact on pension schemes, which have made RPI-linked investments in the interests of their members, in good faith.
“Workers’ savings must not be unduly compromised by an administrative change in the measure of inflation that acts, in effect, as a stealth tax on retirees. Any change should therefore necessarily be offset by fair and appropriate mitigation for schemes.”
Mark Smith, Senior PR Manager
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Steven Kennedy, PR Manager
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