(1)Subject to subsections (2) and (3), in the case of such benefits as are mentioned in section 83(1)(a), any pension or other retirement benefit payable under the scheme in question to the member and any pension or other benefit payable under it to any other person in respect of him, is to be revalued by the final salary method.
(2)If—
(a)any such benefit is an average salary benefit or flat rate benefit; and
(b)it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue the benefit by the average salary method or, as the case may be, the flat rate method,
then the benefit shall be revalued using that method.
(3)If any benefit such as is mentioned in paragraph (a) of section 83(1) is a money purchase benefit, and in the case of such benefit as is mentioned in paragraph (b) of that section, the benefit shall be revalued using the money purchase method.
(4)In this section—
“average salary benefit” means benefit the rate or amount of which is calculated by reference to the average salary of a member over the period of service on which the benefit is based;
“flat rate benefit” means any benefit the rate or amount of which is calculated by reference solely to the member’s length of service;
“average salary method”, “final salary method”, “flat rate method” and “money purchase method” have the meanings given in Schedule 3.
(5)The fact that a scheme provides for the amount of the pension or other benefit for a member or for any other person in respect of him to be increased during the pre-pension period—
(a)by the percentages specified during that period under section 151(1) of the [1992 c. 5.] Social Security Administration Act 1992 (directions specifying percentage increases for up-rating purposes); or
(b)under any arrangement which, in the opinion of the Board, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain during that period,
does not in itself result in conflict with this section, if the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or a member’s widow or widower has not been deducted.