The Court of Appeal decided that the trustees of Barnado’s pension scheme cannot switch from the Retail Prices Index, or RPI, to the Consumer Prices Index, or CPI, just for revaluation and indexation purposes.

Some HR experts feel this particular ruling comes in the form of a blow to employers with multiple pension schemes, with inflation protection wording similar to this case.  If the judgement was in favour of the change, according to some human resource experts, this type of employer could have seen a way forward in reducing scheme deficits.  Now, since the statutory power cannot be overridden, this will all depend on the wording of each scheme’s rules.

In the aforementioned case, the Court of Appeal ruled the scheme’s deed doesn’t necessarily afford the trustees the ability to select the index by which increases are measured.  However, there is still a lot of uncertainty about how this will work even for schemes that have clear built-in discretions to switch to another index.