ONS : Result of Consultation on RPI Calculation

10 January 2012 The Office for National Statistics has announced the result of their review into the RPI calculation methodology. This product is used as a key reference index for UK index-linked securities and derivatives as well as being the reference for some benefit increases in defined benefit pensions entitlement. The ONS have recommended that the calculation of the RPI remain unchanged : thus protecting the status of RPI-linked pensions and financial assets : whilst acknowledging the shortcomings in the methodology by adding the new RPIJ index based on geometric averaging (which is consistent with both the CPI and generally…

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ONS : Pre-Announcement of Consultation on RPI Calculation Methodology

19 September 2012 The Office for National Statistics has announced that the National Statistician will shortly be consulting (from 8 October to 30 November 2012) on updating the calculation methodology for the Retail Price Inflation index. This product is used as a key reference index for UK index-linked securities and derivatives as well as being the reference for some benefit increases in defined benefit pensions entitlement. Author: Martin Veasey © www.veaseyassociates.co.uk 2011 – 2018

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Inflation and Defined Benefit Pension schemes

31 October 2011 October saw the release of notably high inflation figures – a two year peak for CPI and a twenty year peak for RPI – coinciding with the setting of pension increases for UK defined benefit pension schemes with September year-end. We provided a brief update at the time of release here but here present a more detailed paper on the direct and indirect impacts of inflation on these schemes. Inflation provides a good example of a crucial factor that affects both sides of the DB scheme balance sheet and our response as pension professionals should therefore bear…

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ONS : UK Inflation Update September 2011

18 October 2011 UK inflation numbers just out from the Office of National Statistics: 12 months to end September 2011: Consumer Price Inflation came in at 5.2% (an increase from 4.5% last month) Retail Price Inflation came in at 5.6% (an increase from 5.2% last month) The figures are high and will form the basis of calculation for DB scheme benefit increases as at end September : compared to 4.2%/5.0% (CPI/RPI) for June and 4.1%/5.3% for March. Schemes calculating benefit increases at the end of December have so far seen prices increase by 3.5%/4.2% for the 2011 year to date,…

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