Pension scheme liabilities hit by inflation rise

From April 2011, private sector final salary occupational pension schemes have been allowed to index pension payouts by CPI instead of the higher RPI if their scheme rules do not specifically prevent it. CPI was 5.2% and RPI at 5.6% in September. Experts said the narrowing of the figures were of concern for private sector scheme trustees who had hoped the switch would cut their liabilities. KPMG pensions partner Mike Smedley said the rise in CPI would ease the "pensions lottery effect". "The ‘pensions lottery' effect of there being a major difference to pensions increases according...