Pension amounts are in principle calculated by indexing to the previous year's price fluctuations.

Literal

Pension [possessive-の] amount [topic-は] principle [as-として] previous-year [possessive-の] price-change [to-に] sliding calculated.

原則として ('in principle, as a rule') is the standard framing for policy statements. 物価変動 ('price fluctuations') is economics vocabulary. スライドして ('by sliding/indexing') is the loan verb for adjustment. 算出される (さんしゅつされる, 'is calculated') is formal passive. A policy explanation sentence that demonstrates Japanese bureaucratic language.