Twice yearly adjustment of pensions
DFRDB pensions will be automatically adjusted twice yearly if there are upwards movements in the Consumer Price Index (CPI) for the six months ending 30 September and 31 March each year. Your pension will not decrease if there is a downwards movement in the CPI.
As a pensioner, you will receive a statement in January and July showing any adjustment to your rate of pension. Your income tax payment summary and other relevant information will be included with the July statement.
Your initial pension adjustment will be proportional, according to the number of months that you have been receiving the pension up to 31 March or 30 September. Subsequent twice yearly adjustments will receive the full amount.
Commutation and CPI adjustments
If you elect to commute from four times retirement pay up to the maximum multiple, the total amount of the remaining retirement pay is CPI indexed. However, if you do not elect to commute, or you elect to commutate less than four times retirement pay, CPI indexation will only be applied to your notional retirement pay, which is the rate of retirement pay that would be payable if you had elected to commute four times retirement pay. This is illustrated in the notes following Example B ('Commutation' section).