SCHEDULES
F1SCHEDULE 1A
Part I Revaluation of Pensions
1
1
This Part of this Schedule applies to any member of an occupational pension scheme whose pensionable service terminates after the commencement of this schedule if—
a
it terminates before normal pension age; and
2
In this Part of this Schedule “the revaluation condition” means—
C1a
in relation to benefit payable to the member, that, subject to subparagraph (3) below, there are 365 days or more in the period of which the first day is the day after the date when his pensionable service terminates and the last is the day on which he attains normal pension age;
b
in relation to benefit payable to any other person in respect of the member, that, subject to sub-paragraph (3) below, there are 365 days or more in the period mentioned in paragraph (a) above and the member dies after attaining normal pension age.
3
For the purpose of calculating the number of days in the period mentioned in sub-paragraph (2) above, any day which is 29th February shall be disregarded.
4
For the purposes of this Part of this Schedule “normal pension age” . . . F3 and, subject to paragraph 2(3) below, “pensionable service” are to be construed in accordance with Schedule 16 to the Social Security Act 1973.
C22
1
Subject to the following provisions of this Schedule, if the revaluation condition is satisfied—
a
any pension or other retirement benefit payable under the scheme to the member; and
b
any pension or other benefit payable under it to any other person in respect of him,
is to be revalued by adding the appropriate amount to the amount that would be payable but for this Schedule or regulations made under it.
2
For the purposes of this Schedule “the appropriate amount” is
, where—
a
A = the revaluation percentage specified in the last period of one year beginning on the date of the commencement of this Part of this Schedule or on an anniversary of that date and ending before the date on which the member attains normal pension age as the revaluation percentage for the period which is of the same length as the number of complete years in the period mentioned in paragraph 1(2)(a) above;
b
B = the length of the member’s qualifying pensionable service;
c
C = the length of his pensionable service;
d
D = the amount of the pension or other benefit—
i
which on the date when his pensionable service terminates has accrued to him or to any other person in respect of him; . . . F4
ii
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F4;
C3e
E = any part of the amount mentioned in paragraph (d) above which consists of the member’s or his widow’s guaranteed minimum.
3
In sub-paragraph (2)(b) and (c) above—
“pensionable service” includes any notional pensionable service which is credited to the member by the scheme; and
F5“qualifying pensionable service” means—
a
where the termination of pensionable service occurs after the coming into force of this paragraph of this definition, the whole of the member’s pensionable service, as defined in this sub-paragraph; and
b
in any other case, so much of any such service as falls on or after 1st January 1985.
4
For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member’s actual pensionable service began.
5
Any rule of a scheme the effect of which is that benefit fails to be revalued by reference to any period is to be disregarded in making any calculation required by this paragraph.
3
1
This paragraph applies to any benefit the rate or amount of which is calculated by reference to the member’s average salary over the period of service on which that benefit is based.
2
A benefit to which this paragraph applies is referred to in this Schedule as an “average salary benefit”.
3
Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any average salary benefit payable to the member or to any other person in respect of him is to be revalued—
a
by revaluing his salaries during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
b
by the method specified in paragraph 2 above.
4
The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate.
5
In this paragraph “salaries”F6means, subject to sub-paragraph (5A) below, the member’s salaries for the period between the date when his pensionable service commenced and the date when it terminated, or such part of them as was relevant under the scheme to the calculation of the retirement benefits payable under the scheme to him or to any other person in respect of him; and those salaries are to be taken for the purposes of this paragraph to include—
a
any amount which is attributed to them, otherwise than by virtue of this paragraph, as the result of a revalution for which the rules of the scheme provide; and
b
any amount which is for any reason credited to the member by way of salary notionally earned.
F75A
Where the member’s pensionable service terminated before the coming into force of this sub-paragraph, sub-paragraph (5) above shall have effect with the substitution for the words from, “means” to “terminated” of the words “means the member’s salaries for the period between 1st January 1985 and the date when his pensionable service terminated”.
6
For the purposes of the application of this Paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member’s actual pensionable service began.
4
1
This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member’s length of service.
2
A benefit to which this paragraph applies is referred to in this Schedule as a “flat rate benefit”.
3
Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or to any other person in respect of him is to be revalued—
a
by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or
b
by the method specified in paragraph 2 above.
4
The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in sub-paragraph (3) above appears to the trustees or managers of the scheme to be appropriate.
5
1
This paragraph applies to any benefit the rate or amount of which is calculated by reference to a payment or payments made by the member, or by any other person in respect of him F8and which is not an average salary benefit.
2
A benefit to which this paragraph applies is referred to in this Schedule as a “money purchase benefit”.
3
In the case of such a benefit, if the revaluation condition is satisfied, the investment yield and any bonuses arising from payments made by or on behalf of a member shall be applied, subject to sub-paragraph (4) below, towards providing any pension or other retirement benefit which is payable under the scheme to him or to any other person in respect of him in the manner in which they would have been applied if his pensionable service had not been terminated.
4
The Secretary of State may by regulations authorise trustees and managers of schemes to deduct from any pension or other retirement benefit provided under sub-paragraph (3) above an appropriate amount in respect of the administrative expenses incurred by them in carrying this paragraph into effect.
6
Nothing in paragraph 2, 3, 4 or 5 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit.
C47
1
Subject to sub-paragraph (2) below, this Part of this Schedule overrides any provision of a scheme to the extent that it conflicts with this Part of this Schedule.
2
This Part of this Schedule does not override a protected provision of a scheme.
3
Subject to sub-paragraph (4) below, in sub-paragraph (2) above “protected provision” has the same meaning as it has in subsection (2) of section 41C above by virtue of subsection (3) of that section.
4
In its application to schemes which are not contracted-out section 41C(3) above shall have effect for the purpose of this paragraph as if—
a
there were omitted—
i
from paragraph (a), sub-paragraph (ii) and the word “or” immediately preceding it;
ii
from paragraph (b), the word “and”; . . . F9
iii
from paragraph (c), the words from “authorised” to the end; and
F10iv
from paragraph (e), the words from “as respects” to “guaranteed minimum pension”.
b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F11
8
If under a scheme—
a
the amount of the pension or other benefit for a member or for any other person in respect of him falls to be increased during the period mentioned in paragraph 1(2)(a) above—
i
by the percentages specified during that period under F12section 151(1) of the Administration Act; or
ii
under any arrangement which, in the opinion of the Occupational Pensions 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; and
C5b
the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or his widow has not been deducted,
the fact that the scheme provides as mentioned in sub-paragraph (a) above does not in itself result in conflict with paragraph 2, 3 or 4 above.
C69
In making any calculation for the purposes of this Part of this Schedule any commutation, forfeiture or surrender of the whole or part of a pension shall be disregarded.
10
The same money may not be treated as providing both the benefit required by section 41A or 41B above and the increase in benefit required by this Part of this Schedule.
Sch. 1A repealed (7.2.1994) by 1993 c. 48, s. 188(1), Sch. 5 Pt. I; S.I. 1994/86, art. 2