UK - Alliance Boots will transfer all accrued pension benefits for one of its defined benefit (DB) schemes to the Pension Insurance Corporation (PIC).

Under the terms of the agreement, which applies to the Alliance UniChem UK Group Pension Scheme, scheme members be offered individual insurance contracts.

Once all benefits have been secured, the Alliance UniChem UK Scheme Trust will be dissolved, the company said.

The smaller of the two DB schemes, with around £300m in assets, Alliance UniChem was closed in July, along with the Boots Pension Scheme and replaced with a defined contribution plan.

The decision was reached after several months of consultation, with the company saying the introduction of a DC scheme would allow greater participation in the pension scheme.

At the time, Alliance Boots executive chairman Stefano Passina said the closures ensured "the long-term sustainability of the group's UK retirement savings schemes".

Offsetting pension risk by negotiating buy-ins and buyouts has become increasingly common in the UK, with airline Alitalia recently transferring £53m of assets from its UK pension scheme to the PIC.

Both LCP and Hymans Robertson have also predicted an increase in pension risk transfer deals over the next two years.

In other news, the president of the Royal Statistics Society (RSS) David Hand has raised concerns about linking pension increases to the consumer price index (CPI) from April next year.

In an open letter to Sir Michael Scholar, chair of the UK Statistics Authority, Hand said the RSS was concerned about the increased prominence of CPI, saying it was now the headline index, "even though it is not necessarily the best index for all purposes".

Hand further mentioned the risk of inequality posed by some pensions still being linked to the retail price index (RPI), with the annual disparity between the two indices usually at 0.43.

He said this would result in pensioners whose pension payments were linked to RPI being "noticeably better off after a few years" than those with CPI indexation.

The president went on to question whether the exclusion of various commonplace taxes and levies, as well as house prices, from the calculation of CPI made it an appropriate measure.

Hand said: "We do not feel CPI should have sole star billing in this way.

"While the policy use of the CPI clearly makes it a key index, other indices are key for other uses."

Finally, the National Association of Pension Funds (NAPF) has said government proposals for pension tax relief are in need of "urgent fine-tuning".

With the annual allowance expected to decrease from £255,000 to £30,000-45,000, the pension fund umbrella organisation said people who received one-off benefits as a result of redundancy or early retirement should be allowed to spread these out over as long as five years.

Joanne Segars, chief executive of the NAPF, said that while the government had the correct overall approach, the details needed to be worked on.

"The planned regime has thrown up a series of issues that must now be resolved," she said.

"If they are not, many people risk getting caught up in a bewildering and expensive set of rules that were aimed at those earning much more."

Consultancy Hewitt agreed that allowances should be made for those who receive one-off payments and suggested a similar, but shorter, timeframe over which the payments should be spread.

Tony Baily, a pension consultant at the company, said he welcomed the government's proactive approach on the current consultation.

"We are glad to see the government has listened to the pension industry's concerns about the complexity of the previous proposals and the potentially debilitating effect on those high earners who often shape pension policy in companies," he said.

"The need for simplicity is paramount, even if this means a moderately lower reduced Annual Allowance is needed."

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