SCHEDULES
SCHEDULE 6PENSION COMPENSATION PROVISIONS
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%;
- a
“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;
- a
“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.
- a
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;
- a
“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;
- a
“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).