SCHEDULE 1 FURTHER PROVISIONS REPLACING SECTION 35(4) OF THE 1966 ACT: INCREASES OF GRADUATED RETIREMENT BENEFIT AND LUMP SUMS

PART 1 Increase and lump sum where entitlement to retirement pension is deferred

6 Calculation of lump sum
(1) The lump sum is the accrued amount for the last accrual period beginning during the period of deferment.
(2) In this paragraph –
“accrued amount” means the amount calculated in accordance with sub-paragraph (3);
“accrual period” means any period of seven days beginning with the day of the week on which Category A or Category B retirement pension would have been payable to a person in accordance with regulation 22(3) of, and paragraph 5 of Schedule 6 to, the Claims and Payments Regulations, if his entitlement to a retirement pension had not been deferred, where that day falls within the period of deferment.
Paragraph 5 of Schedule 6 was amended by regulation 10(6)(a) of S.R. 2001 No. 108 and regulation 2(10)(a) and (b) of S.R. 2002 No. 297
(3) The accrued amount for an accrual period for a person is –
(A+P)×(1+R100)32
where –
A is the accrued amount for the previous accrual period (or, in the case of the first accrual period beginning during the period of deferment, zero);
P is, subject to sub-paragraph (5), the amount of the graduated retirement benefit to which the person would have been entitled for the accrual period if his entitlement to a Category A or Category B retirement pension had not been deferred;
R is –
(a) a percentage rate two per cent. higher than the Bank of England base rate; or
(b) if a higher rate is prescribed for the purposes of paragraphs 3B and 7B of Schedule 5, that higher rate.
(4) For the purposes of sub-paragraph (3), any change in the Bank of England base rate is to be treated as taking effect –
(a) at the beginning of the accrual period immediately following the accrual period during which the change took effect; or
(b) if regulations under paragraph 3B(4) of Schedule 5 so provide, at such other time as may be prescribed in those Regulations.
(5) Regulation 3 of the Deferral Regulations shall have effect for the purposes of this paragraph in like manner to graduated retirement benefit as it does to retirement pension in the calculation of the lump sum under paragraph 3B of Schedule 5.