Change to the basis for some pension increases
In 2010 the Government announced that increases to public sector pensions would be made in line with Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI) with effect from April 2011.
The legislation that governs the public sector pension increases underlies the statutory increases to private sector pensions. It has been confirmed that CPI will be the basis for calculating inflation-linked statutory revaluation (for deferred pensions) and pension increases (for pensions in payment) for all defined benefit occupational pensions, where individual pension scheme rules do not specifically stipulate that RPI must be used when calculating increases.
An analysis of the rules of the basis of pension increase calculations of the various IBM pension plans is available for download below. Please refer to the section which is relevant to the pension plan of which you were a member, to establish any changes to the basis of the increases in your pension entitlement.
Additional Voluntary Contributions (AVCs) pension
If you are in receipt of any pension from your AVC investment, increases on your AVC pension will not be affected by the move to CPI that has been applied to some Main Plan pension. If you elected to receive Limited Price Indexation (LPI) increases up to 5% or 2.5%, this remains based on RPI.
If you have any questions, please contact Pensions Services