The Pensions (Northern Ireland) Order 2005

Annual increase in periodic compensation

28.—(1) This paragraph provides for the increases mentioned in sub-paragraph (3)(b) of paragraphs 3, 5, 8, 11, 15 and 22.

(2) Where a person is entitled to periodic compensation under any of those paragraphs, he is entitled, on the indexation date, to an increase under this paragraph of—

(a) the appropriate percentage of the amount of the underlying rate immediately before that date, or

(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which he was so entitled.

(3) In sub-paragraph (2)—

“appropriate percentage” means the lesser of—

(a)

the percentage increase referred to in paragraph 28(3)(a) of Schedule 7 to the Pensions Act 2004, and

(b)

2.5%;

“indexation date” means—

(a)

the 1st January next falling after a person first becomes entitled to the periodic compensation, and

(b)

each subsequent 1st January during his lifetime;

“underlying rate” means, in the case of periodic compensation under any of the paragraphs mentioned in sub-paragraph (1), the aggregate of—

(a)

so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and

(b)

the amount within sub-paragraph (3)(b) of that paragraph immediately before the indexation date.

(4) Where paragraph 26(3) (compensation cap) applies to restrict the amount of periodic compensation under one of the paragraphs mentioned in sub-paragraph (1), the amount mentioned in sub-paragraph (3)(a) of the paragraph in question is attributable to post-1997 service and pre-1997 service in the same proportions as the amount so mentioned would have been so attributable had paragraph 26(3) not applied.

(5) Where a portion of periodic compensation under one of the paragraphs mentioned in sub-paragraph (1) has been commuted under paragraph 24—

(a) for the purposes of sub-paragraph (2), the definition of “underlying rate” in sub-paragraph (3) applies as if the reference in paragraph (a) of the definition to the amount mentioned in sub-paragraph (3)(a) of the paragraph in question were a reference to that amount reduced by the commutation percentage, and

(b) that amount (as so reduced) is attributable to post-1997 service and pre-1997 service in the same proportions as that amount would have been so attributable had no part of the periodic compensation been commuted.

(6) In this paragraph—

“post-1997 service” means—

(a)

pensionable service which is within paragraph 36(4)(a) and occurs on or after 6th April 1997; or

(b)

pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;

“pre-1997 service” means—

(a)

pensionable service which is within paragraph 36(4)(a) and occurred before 6th April 1997; or

(b)

pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;

“the commutation percentage”, in relation to periodic compensation, means the percentage of that compensation commuted under paragraph 24.

(7) But in this paragraph, in relation to any relevant pension credit amount, “post-1997 service” and “pre-1997 service” have such meanings as may be prescribed.

(8) In sub-paragraph (7), “relevant pension credit amount” means an amount mentioned in sub-paragraph (3)(a) of—

(a) paragraph 3,

(b) paragraph 5, or

(c) paragraph 15 as it applies by virtue of paragraph 21,

which is attributable (directly or indirectly) to a pension credit.

(9) This paragraph is subject to paragraph 29 (Board’s power to alter rates of revaluation and indexation).