UK - UK pension scheme rules will not be overturned, mandating the use of the consumer price index (CPI) as the sole measure of indexation, pensions minister Steve Webb has said.
The government had previously announced that public sector pensions would now only increase in line with CPI, rather than the higher retail price index (RPI).
As RPI was often outright stated as the measure of inflation in scheme rules, it consulted on whether legislation should seek to introduce CPI instead.
Webb said many schemes now found themselves in a more sustainable situation due to the switch.
However, he added that CPI would serve simply as the lowest possible inflation increase.
"We have set CPI as the statutory minimum, but many schemes can and will pay more, and we will not give schemes power to change their rules," he said.
Explaining the decision, the consultation noted: "Although some respondents felt a statutory override was necessary, the vast majority agreed with the government's view and were not in favour of imposing a statutory override."
It quoted submissions from the Trades Union Congress, which argued there was "no justification" for overturning scheme rules, while the Association of British Insurers said it "welcomed" the decision not to authorise a statutory override through legislation.
However, the Confederation of British Industry, one of the country's main business lobbying groups, was one of the few submissions urging a direct override.
An impact assessment published by the DWP earlier this year calculated that the introduction of CPI would likely cut annual pension payments by as much as a third.
The consultation added: "The government does not think it appropriate to override the rules of schemes that in some cases provide better benefits than the statutory minimum and where the trustees and employer are happy to continue with that arrangement."
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