Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps she is taking to prevent companies sponsoring pensions from reducing pension indexation rates below promised levels.

Defined Benefit schemes are legally required to increase pensions in payment annually (for pension rights earned from April 1997 onwards) to provide pensioners with a measure of protection against the effects of inflation.

Before April 1997, there was no statutory requirement on defined benefit schemes to increase pensions once in payment, apart from any Guaranteed Minimum Pension element (paid in place of the additional State Pension) earned between April 1988 and April 1997 which must be increased by inflation capped at 3 per cent.

Defined Benefit schemes must meet the legal minimum requirements. However, schemes can and do make more generous arrangements through the scheme rules. If the scheme rules provide for increases above the legal requirements these increases must continue to be paid.

If a member thinks the trustees or sponsoring employer have acted outside the scheme rules, they can take the matter up with the pension scheme through the Internal Dispute Resolution arrangement the scheme is required to have in place.

If the Internal Dispute Resolution arrangement does not provide a satisfactory conclusion, they may wish to consider taking the case to the Pensions Ombudsman.