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ARTICLE · 29 DECEMBER 2016

RPI/CPI: RPI, Or New Chapter?

Wedlake Bell LLP
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The Court of Appeal disagreed and, on the particular wording of the Rules, held that the power to switch arises only if RPI has been officially replaced.

United KingdomEmployment and HR
Clive Weber
Clive Weber

Relief for members and disappointment for employers: on 2 November 2016 the Court of Appeal upheld the High Court decision in Buckinghamshire v Barnardo's, thus precluding the Barnardo's scheme trustees from any switch from RPI to CPI for pension increases.

Recap

The Barnardo's scheme rules defined "Retail Prices Index" as the index published by the Department of Employment "or any replacement adopted by the Trustees without prejudicing Approval."

In 2015 the High Court decided that "replacement" meant officially replaced and that, as RPI remained officially published, it had not been replaced. Therefore, under the scheme rules the trustees could not switch from RPI to CPI increase. For further background please see our November 2015 e-Bulletin article "To switch or not to switch: that is the question".

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