Occupational pension schemes are required to provide Limited Price Indexation on all pensions benefits accruing after 5 April 1997. The annual LPI increase is 5% per annum or the increase in the Retail Price Index, if less.
the requirement to increase pensions in excess of GMP by the rate of inflation up to 5 per cent. The increase applies to all pension entitlement built up after 6 April 1997.
The requirement under PA95 to increase, by 5% pa or RPI if less, pensions in payment under an occupational pension scheme approved under Chapter I (excluding AVCs and FSAVCs) and pensions in payment arising from protected rights under an appropriate personal pension scheme or an appropriate personal pension stakeholder pension scheme. It applies to pensions accrued in respect of service after 5 April 1997.
Protects pensions in payment against inflation up to Retail Prices Index or 5%, whichever is the lower.
This is a part of the law that says pensions paid by an occupational pension scheme , and protected rights paid by an appropriate personal pension scheme must increase by at least a certain rate each year. This rate is five per cent, or the increase in the Retail Price Index, whichever is less. LPI does not affect additional voluntary contribution (AVC) or free-standing additional voluntary contribution (FSAVC) schemes. It only applies to pension benefits earned after 5 April 1997. Any benefits earned before this come under the guaranteed minimum pension (GMP) . A member who worked both before and after this date would have some of their benefits affected by GMP and some by LPI.
Pensions paid by an Occupational Pension Scheme, and Protected Rights paid by an Appropriate Personal Pension Scheme must increase by at least 5% per annum, or the increase in the Retail Price Index, whichever is less. It applies to pensions accrued in respect of service after 5 April 1997. LPI will be removed for all money purchase benefits including Protected Rights from April 2005.