CONSULTATION ON DRAFT REGULATIONS FOR PENSION INCREASE IN LINE WITH CONSUMER PRICE INDEX
13 August 2010
The Government has published a consultation document on the Financial Assistance Scheme and Pension Protection Fund (Valuation, Revaluation and Indexation Amendments) Regulations 2011.
The draft regulations provide for changes so that FAS and PPF payments will in future increase in line with the consumer prices index rather than the retail prices index.
Draft regulations will cover:
• PPF and FAS revaluation rules so that revaluation applies in line with the RPI up to the date the regulations come into force (expected end March 2011) and in line with the CPI from that date.
• The FAS cap so that the CPI is used for the annual increase to the cap that will be made in April 2011 and subsequent years.
• The legislation governing the section 143 funding test applied by the PPF to relevant schemes, so that the changes to PPF compensation rules can be taken into account when certain schemes are undertaking valuations before entering the PPF.
• The indexation of relevant FAS payments so that such increases are undertaken in line with the CPI from 1 January 2012. (PPF changes to indexation need to be made through primary legislation we intend to coordinate the FAS and PPF indexation changes to retain consistency between FAS and PPF payments).
The consultation finishes on the 3rd November 2010 and the link/ address to respond by email or by letter are contained in the covering letter to the consultation document.