UK - The Office of National Statistics has launched a review of the retail prices index (RPI), with the consultation examining whether any or all of the prices for the basket of goods included in the inflation index should be averaged.

Discussing the previously announced review, the National Association of Pension Funds (NAPF) head of policy Darren Philp warned that changes to the formula could have "huge implications" for pension funds.

In a statement, the ONS said the consultation would also ask for feedback on the best data source for private housing prices, one of the many items in the basket, for the calculation of RPI and the consumer prices index (CPI).

"The consultation invites views on proposals to change the data source for the measurement of these prices," it said. "Subject to the consultation responses, this change would be introduced in March 2013."

Malcolm McClean of consultancy Barnett Waddingham warned that critics could view the ONS consultation as a "back-door method" to save further in the wake of changes in indexation measures to public sector pensions.

"This constant moving of the goal posts illustrates the difficulty scheme sponsors have in budgeting and cost control, and for members in making their retirement plans with any degree of certainty as to their likely levels of pension income."

He added that the proposed changes also risked making the results of RPI and CPI broadly similar.

McLean therefore questioned the continued need for two separate indices.

The ONS accepted that both indices would become similar, but said differences would remain between the estimates produced by each because of the "different coverage, weights and scope used".

The NAPF's Philp echoed his previous statements and added that changes could have "far-reaching consequences".

"The ONS has set out a few different routes, and we will consider their wider implications for the pensions landscape," he said.

Interested parties have until the end of November to respond.

Meanwhile, consultancy Towers Watson has won a £100m (€123m) fiduciary mandate from the Willis Pension Scheme.

The £1.5bn fund will hand the consultancy responsibility for its hedge fund investments.

According to a study of fiduciary management providers in the current issue of IPE, at the end of June, Towers Watson managed €45bn of fiduciary mandates worldwide.

Of those, nearly three-quarters, or €32bn, came from European institutional clients.

The consultancy also saw some of the strongest inflows of those surveyed in the 12 months to June, reporting new awards worth €7bn.