UK – The decision to no longer regard the retail prices index (RPI) as a national statistic is not a surprise, Axa Investment Managers has said.

The UK Statistics Authority announced late last week that, following a statutory re-assessment of the inflation measure, it had been found that "the formulation of the RPI [failed] to meet international standards".

The review had previously resulted in the Office of National Statistics announcing it would soon produce a new measure, RPI Jevons, which employs the British economist's approach of a geometric average rather than the current arithmetic average.

But Ros Altman, formerly the director general of Saga Group, said the announcement had been kept "very quiet" and that, in future, there would likely be a shift away from RPI as a measure of inflation.

"If it is no longer considered to be a 'national statistic', will pension trustees decide to stop using it for pensioner increases in future?" she asked, arguing that any such change would likely be challenged in court.

However, Axa IM senior portfolio manager David Dyer argued that the removal of RPI as a national statistic was "in line with what [the UK Statistics Authority] previously indicated" and should not be seen as a surprise.

"When I've spoken to them about it before," he told IPE, "they've always emphasised the fact it doesn't mean any diminishing quality in the way the statistic is produced – it's just that they see it as not recommended best practice."

He added that there was some reputational risk, as UK inflation-linked Gilts were still linked to RPI and that this might have an impact on overseas investors.

In other news, the National Association of Pension Funds has warned of the "tight timeframe" facing the industry to implement the state pension reform, following a decision to bring the changes forward by a year.

Chancellor George Osborne told the BBC on Sunday that the single-tier state pension would now be in place by April 2016 – a year earlier than announced in January and in line with the date initially given in the Department for Work & Pensions (DWP) green paper in 2011.

The reform, which will abolish the state second pension (S2P) and thereby end the practice of contracting employees out of the pillar, was welcomed by the NAPF, but it warned the shorter timeframe to deliver change could pose problems.

Joanne Segars, the organisation's chief executive, said: "If the government gets it wrong, then this runs the risk of sparking a fresh round of final salary pension closures in the private sector.

"It is essential to give pension funds the flexibility and time to adapt and make the changes."

Segars said the reforms had been long awaited, but concluded: "It would be a shame if big mistakes were made in a rush to implement the changes."

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