Until 2003, Reuters Pension Fund (RPF) increased UK pensions earned before 1997 in line with the Retail Prices Index. Not only did it increase pensions but it also said on many occasions that it intended to continue increasing them in the future.

For example, when the law was changed in 1997 and the Fund’s rules were modified in line with the new obligations, an RPF newsletter said: “The Managing Committee, with the approval of the Actuary, increased the reserve provided in the actuarial valuation for the provision of discretionary increases on all pensions from 4% per annum to 5% per annum.”

In the same newsletter, the Actuary’s report said the assumptions for the 1995 valuation were slightly more realistic but remained “very prudent”. It added: “In particular, the actuarial assumptions reflect the Managing Committee’s aim to maintain future increases to pensions in line with price inflation.”

However, for those who retired before 1997, no increases to keep up with inflation were made in 2003 (except for those aged over 75) 2004 and 2005. Increases in line with inflation were resumed in 2006, with 2.7%, 3.7% and 3.9% paid in 2006, 2007 and 2008 respectively. No increase was paid in 2009 or 2011.

By contrast, pensions earned from contributions made between 1997 and 2005 were increased in line with inflation every year until 2022, except for 2012. For that year, when inflation was 5.6%, the increase was capped at 5.0%.

A comparison of the policies of FTSE 100 companies, past and present, produced the following (details were mostly supplied in 2005.)

Of 100 companies contacted, eight had no final salary pension schemes.

Of the remaining 92,

• 68 paid increases on pensions earned from contributions made before 1997. In most cases there was no difference between the increases paid on pensions earned before 1997 and those earned after 1997. The policy for most of these companies was to match RPI up to 5% but in some cases the cap was 10% and a few had no maximum increase.
• a further 23 funded their pension schemes on the basis that pensions would be increased in line with inflation, according to their annual reports; of these, six declined to supply further details, while 17 did not respond to queries.
• one (Reuters) used to pay increases but suspended this policy for 2003, 2004, 2005, 2009 and 2011.