10(1)Section 234 (defined benefits arrangements) is amended as follows.U.K.
(2)In subsection (4)—
(a)for “10” substitute “ 16 ”,
(b)in the definition of PB, for “beginning of the pension input period” substitute “ end of the immediately preceding pension input period (or is nil if the pension input period is the first pension input period of the arrangement) ”, and
(c)in the definition of LSB, for “that time” substitute “ the end of the immediately preceding pension input period (or is nil if the pension input period is the first pension input period of the arrangement) ”.
(3)In subsection (5), for “10” substitute “ 16 ”.
(4)After that subsection insert—
“(5A)If, during the pension input period, minimum payments are made under—
(a)section 8 of the Pension Schemes Act 1993, or
(b)section 4 of the Pension Schemes (Northern Ireland) Act 1993,
in relation to the individual in connection with the arrangement, their amount is to be subtracted from what would otherwise be the pension input amount in the case of the individual in respect of the arrangement.
(5B)The pension input amount in respect of the arrangement is nil if—
(a)the individual is a deferred member of the pension scheme under which it is an arrangement (or would be if it were the only arrangement under the pension scheme relating to the individual) throughout the pension input period or is (or would be) such a deferred member for part of the pension input period and a pensioner member for the rest of it, and
(b)the value of the relevant rights of the individual does not increase during the pension input period by more than the relevant percentage.
(5C)In this section—
“guaranteed minimum pension” has the meaning given by—
section 8(2) of the Pension Schemes Act 1993, or
section 4(2) of the Pension Schemes (Northern Ireland) Act 1993;
“predecessor arrangement”, in relation to an arrangement, means another arrangement (under the same or another registered pension scheme) from which some or all of the sums or assets held for the purposes of the arrangement directly or indirectly derive;
“predecessor registered pension scheme”, in relation to a pension scheme, means another registered pension scheme from which some or all of the sums or assets held for the purposes of the arrangement under the pension scheme directly or indirectly derive;
“the relevant percentage”—
where throughout the pension input period the arrangement (or a predecessor arrangement) includes provision for the value of the relevant rights of the individual to increase at an annual rate specified in the rules of the pension scheme (or a predecessor registered pension scheme) on 14 October 2010, that percentage, and
otherwise, the percentage by which the consumer prices index for a month falling within the pension input period and nominated by the scheme administrator is higher than it was for the same month in the previous period of 12 months (or nil per cent if it is not higher);
“the relevant rights of the individual” means rights of the individual under the arrangement, other than any rights to a guaranteed minimum pension;
“specified”, in relation to an annual rate, means specified as a percentage figure or as a percentage produced by movement in an index (or a combination of the two) but does not include a percentage produced by the exercise of a discretion by any person.”
(5)In subsection (6), for “and section 236 (adjustments of closing value)” substitute “ , section 236 (adjustments of closing value) and section 236A (post-entitlement enhancements) ”.