Barnardo’s trustees did not have discretion to switch a staff pension scheme from the retail prices index (RPI) to the consumer prices index (CPI), the Supreme Court has held.
Ruling in Barnardo’s v Buckinghamshire [2018] UKSC 55, the Justices unanimously dismissed an appeal brought by Barnardo’s, the employer, which had proposed the trustees replace RPI with CPI as the inflationary index for the final salary pension. Increases linked to CPI are generally less than under the RPI.
The Justices held that RPI, which is specified in the scheme rules, must be used unless RPI is discontinued as a measure of inflation.
Stephenson Harwood partner Philip Goodchild, who acted for the trustees, said: ‘This judgment confirms that trustees and employers must be very cautious when considering a change of index.’