Annual increase of certain occupational pensions
13.—(1) After Article 68 of the Pensions Order there shall be inserted the following Article—
“Annual increase in rate of pension, other than guaranteed minimum pension or money purchase benefit
68A.—(1) This Article applies in relation to any occupational pension scheme—
(a)which is neither a public service pension scheme nor a money purchase scheme; and
(b)whose rules do not require the annual rate of every pension which commences or has commenced under the scheme to be increased each year by at least an amount equal to the appropriate percentage of that rate.
(2) On and after the appointed day, Schedule 4A shall have effect for the purpose of requiring the provision by schemes to which this Article applies of annual increases in the annual rates of pensions under those schemes.
(3) In this Article—
“annual rate”, in relation to a pension, means the annual rate of the pension, as previously increased under the rules of the scheme or under Schedule 4A;
“the appointed day” means the day on which this Article and Schedule 4A come into operation;
“the appropriate percentage”, in relation to an increase in the annual rate of a pension, means the percentage specified in the last revaluation order made before the increase is to take effect as the revaluation percentage for the last revaluation period of 12 months;
“money purchase scheme” means a pension scheme under which all the benefits that may be provided are money purchase benefits;
“pension” does not include—
a guaranteed minimum pension or any increase in such a pension under Article 39A; or
any money purchase benefit;
“revaluation order” means an order under Article 53A, “revaluation period” has the meaning given by paragraph (2) of that Article, and “revaluation percentage” means a percentage specified for a revaluation period by a revaluation order.”.
(2) After Schedule 4 to the Pensions Order there shall be inserted the Schedule set out in Schedule 2.
(3) In the case of an occupational pension scheme—
(a)such as is mentioned in paragraph (1) of Article 68A of the Pensions Order, and
(b)which is constituted by trust deed,
no payment shall be made out of the resources of the scheme to or for a person who is or has been the employer of persons in the description or category of employment to which the scheme relates until such time as provision has been made by the scheme for every pension which commences or has commenced under it to be increased as mentioned in sub-paragraph (b) of that paragraph.
(4) Nothing in paragraph (3) applies in relation to payments made to or for a person by virtue of his or any other person’s membership of the scheme in question.
(5) Expressions used in this Article and the Pensions Order have the same meaning in this Article as they have in that Order.
(6) The provisions of paragraph (3) override any provision of a scheme to the extent that it conflicts with them.