The Pensions and Lifetime Savings Association (PLSA) has commented on the letter from Rishi Sunak to Sir David Norgrove on the extension to the consultation period for the timing of reforms to the Retail Prices Index.
Tiffany Tsang, Policy Lead for DB and LGPS, PLSA said: “Due to the circumstances surrounding Covid-19 at the moment, the PLSA believe that it is the correct decision by the Treasury and UKSA to extend the consultation period for the timing of reform to the Retail Prices Index (RPI).
“As we have previously stated, we believe RPI is a flawed measure of inflation, but any 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 tax on employers, savers and pensioners. Any change should therefore necessarily be offset by fair and appropriate mitigation for schemes. We look forward to working with Government to find a pragmatic solution that doesn't unfairly impact individuals' pension savings.”
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Steven Kennedy, PR Manager
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