The High Court has granted permission for a judicial review to be heard on the UK government’s plan for reforming the Retail Prices Index (RPI).
The trustees of the BT Pension Scheme, Ford Pension Schemes and Marks and Spencer Pension Scheme filed a claim for review in April and today they said they had been informed their application had been granted.
Last November, HM Treasury and the UK Statistics Authority (UKSA) announced the decision to effectively replace RPI with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) from 2030. RPI tends to be 1% higher than CPIH.
According to the statement from the trustees today, the court hearing is expected to be held in the summer of next year, when they will “contest the government’s case and defend scheme members and scheme assets from the detrimental effects of a decision which they do not believe have been fully considered”.
The government is expected to produce its defence early next February.
Insight Investment has estimated that over 10 million pensioners will be poorer in retirement as a result of the switch from RPI to CPIH, either from lower payments or lower transfer values, with women to suffer the most as they typically live longer.
The pension funds have also opposed the change because it significantly reduces the value of RPI-linked assets, weakening schemes’ funding positions and in turn adding pressure on sponsoring employers.
The government has said there would be no compensation for holders of index-linked Gilts, which are underpinned by RPI, issued from 2002.