Drinks company Britvic asks for pension inflation measure change

Drinks company Britvic is seeking court approval to begin using the consumer prices index (CPI) in place of the retail prices index (RPI) to measure inflation on its final salary pension scheme.

The changes could see the UK defined benefit pension scheme’s 6,000 members receive lower annual increases in pension benefits, as the CPI is typically lower than the RPI.

Initially reported by The Times, trade union Unison estimated that Britvic’s proposed change could see its members missing out on up to £12,000 over the course of their retirement, with the RPI currently at 2.8 per cent, while the CPI is 1.9 per cent.

Commenting on the announcement, a Britvic spokesperson said: “We are currently reviewing an aspect of our pension provision. In doing so, we are engaging with all key stakeholders, and have remained in close consultation with the funds’ trustees throughout.

“As part of this ongoing process, we are now seeking the court’s consent to move this forward.”

Britvic’s DB scheme was closed to new members in 2002 and to future accrual for active members in April 2011.

BT has previously attempted to make a similar index measurement change, with their initial request being rejected by the High Court in January 2018, before losing subsequent appeals at the Court of Appeal in December 2018 and at the Supreme Court last month (July 2019).

BT was criticised for its decision to appeal to the High Court ruling, with union Prospect's national secretary, Noel McClean, branding it as “extremely disappointing”.

A similar request was also rejected from the charity Barnardo’s, in which the Supreme Court also ruled that the organisation must continue to use RPI and could not switch to CPI.

Currently, all public sector pension schemes are calculated using CPI rather than RPI.

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