Price indices in contracts
Regular adaptation - new base year from January 2013
The consumer price index is adapted regularly at intervals of five years. The a shift from base year 2005 to 2010 was effected on 20 February 2013 when the final results for the reference month of January 2013 were published. The regular adaptation of the consumer price index centred on updating the weighting pattern for goods and services. In addition to that, methodological improvements were implemented. Both have an influence on the price development measured.
What does that mean for parties to a contract with a stable-value clause?
- When checking an adjustment it may be confusing that - due to the new standardised index levels - the "familiar" indices on base 2005 have disappeared and now, apparently, other figures are published. Some users may have taken down the index levels which applied when the contract became effective or when payments were last adjusted and now find it difficult to understand why the present index levels cannot be compared with those older ones. When checking an adjustment, we would therefore ask you to generally refer to our publications for the current index level and the index level of the latest adjustment date.
- The price movement observed since the contract entered into force or since the latest adjustment may change slightly when a new base year is introduced and results are recalculated. Such deviations in the percentage changes from the reference month to the current month are not large but may lead to an adjustment some months earlier or later.
- The above mentioned differences may be due to an adapted weighting pattern – the roughly 600 sub-indices have updated expenditure shares now – and to methodological adjustments such as including seasonal goods to a greater extent. From January 2010, index values were recalculated using the updated calculation bases, and this led to slightly deviating price developments. The index values before January 2010, however, were not recalculated but only converted to the new base year 2010. Therefore, deviations in the percentage changes up to and including 2009 were only very small and merely due to rounding.
- Adjustments made before the regular adaptation shall remain valid in accordance with legal literature – for example the Deutsche Notar-Zeitschrift, No. 9, of September 1991: "Wertsicherungsklausel und Preisindex für die Lebenshaltung" (Stable-value clause and consumer price index). The index series of the former base year, which has been replaced, was not faulty but merely based on older calculation bases.
Stable value based on the consumer price index
For your convenience, we have compiled important information on stable value clauses based on the consumer price index in our general information.
Changeover from discontinued indices to the consumer price index
Consumer price indices for specific types of households for both the "former territory of the Federal Republic" and the "new Länder and Berlin-East" are not computed anymore. Users of stable-value clauses laid down in contracts which are based on discontinued indices will need to recalculate the stable-value clauses on the basis of the consumer price index for Germany. The Federal Statistical Office has taken care to ensure that the changeover from the former indices to the new index is easy and user-friendly.