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Part IVE+W+S Protection for early leavers

Chapter IIE+W+S Revaluation of accrued benefits (excluding guaranteed minimum pensions)

Modifications etc. (not altering text)

83 Scope of Chapter II.E+W+S

(1)This Chapter applies for the purpose of revaluing—

(a)[F1relevant] benefits payable to or in respect of a member of an occupational pension scheme where—

(i)his pensionable service ends on or after 1st January 1986;

(ii)on the date on which his pensionable service ends (in this Chapter referred to as “the termination date”) he has accrued rights to benefit under the scheme;

(iii)the period beginning with the day after the termination date and ending with the date on which he attains normal pension age (in this Chapter referred to as “the pre-pension period”) is at least 365 days; and

(iv)in the case of benefit payable to any other person in respect of the member, the member dies after attaining normal pension age; and

(b)[F1relevant] benefits payable to or in respect of a member of a personal pension scheme—

(i)in respect of whom contributions to the scheme have ceased to be paid; and

(ii)who has accrued rights to benefit under the scheme.

[F2(1A)The following are relevant benefits for the purposes of subsection (1)—

(a)any benefits payable otherwise than by virtue of rights which are attributable (directly or indirectly) to a pension credit, and

(b)in the case of a salary related occupational pension scheme, any benefits payable by virtue of such rights, to the extent that the rights involve the member being credited by the scheme with notional pensionable service.]

[F3(1B)The reference in subsection (1)(a)(iii) to normal pension age is to be read, in relation to a person who is an active or deferred member of a scheme under section 1 or 31(7) of the Public Service Pensions Act 2013, as—

(a)the member's normal pension age within the meaning of that Act, or

(b)the member's deferred pension age within the meaning of that Act, if that is later.

In this subsection “active member” and “deferred member”, in relation to such a scheme, have the meanings given by section 124(1) of the Pensions Act 1995.]

(2)In calculating 365 days for the purpose of subsection (1)(a)(iii), any day which is 29th February shall be disregarded.

(3)In subsection (1)(b)—

(a)the reference to a personal pension scheme does not include a scheme which is comprised in an annuity contract made before 4th January 1988; and

(b)the reference to contributions includes any minimum contributions.

[F4(4)For the purposes of this section, an occupational pension scheme is salary related if—

(a)it is not a money purchase scheme, and

(b)it does not fall within a prescribed class.]

Textual Amendments

Modifications etc. (not altering text)

Commencement Information

I1Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

84 Basis of revaluation.E+W+S

(1)[F5Subject to subsections (2) to (3B)], 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 [F6other than a collective 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.

[F7(3A)If—

(a)any such benefit as is mentioned in section 83(1)(a) is a cash balance benefit in respect of which the available sum is not calculated by reference to final salary;

(b)the benefit is attributable to periods of pensionable service falling on or after the day on which section 29 of the Pensions Act 2011 (definition of money purchase benefits) comes into force; and

(c)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 cash balance method,

then the benefit shall be revalued using that method.

[F8(3AA)If any such benefit as is mentioned in section 83(1)(a) is a collective money purchase benefit, the benefit shall be revalued using the cash balance method.]

(3B)Where a cash balance benefit in respect of which the available sum is not calculated by reference to final salary—

(a)is attributable to periods of pensionable service falling partly before and partly on or after the day on which section 29 of that Act comes into force; and

(b)it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue so much of the benefit as is attributable to the member’s pensionable service falling on or after that day by the cash balance method,

then so much of the benefit as is attributable to the member’s pensionable service falling on or after that day shall be revalued using that method.]

(4)In this section—

(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 M1Social Security Administration Act 1992 (directions specifying percentage increases for up-rating purposes); F12... [F13or

(b)under any arrangement which [F14, in the opinion of the Secretary of State, 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 [F15widow, widower [F16, surviving same sex spouse] or surviving civil partner] has not been deducted.

F17(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6Words in s. 84(3) inserted (11.2.2021 for specified purposes, 1.8.2022 in so far as not already in force) by Pension Schemes Act 2021 (c. 1), s. 131(1)(3)(a), Sch. 3 para. 2(2); S.I. 2022/721, regs. 1(2), 3(a)

F8S. 84(3AA) inserted (11.2.2021 for specified purposes, 1.8.2022 in so far as not already in force) by Pension Schemes Act 2021 (c. 1), s. 131(1)(3)(a), Sch. 3 para. 2(3); S.I. 2022/721, regs. 1(2), 3(a)

F13S. 84(5)(b) and word inserted (18.11.2004) by Pensions Act 2004 (c. 35), ss. 281(2), 322(2)(b) (with s. 313)

Modifications etc. (not altering text)

Commencement Information

I1Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

Marginal Citations

85 Revaluation not to apply to substituted benefit.E+W+S

Nothing in this Chapter is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of section 73(2)(b) [F18or 101D(2)(b)] by way of complete substitute for another pension or benefit.

Textual Amendments

Modifications etc. (not altering text)

Commencement Information

I1Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2

86 Supplementary provisions.E+W+S

(1)In making any calculation for the purposes of this Chapter in relation to any occupational pension scheme—

(a)any commutation, forfeiture or surrender of,

(b)any charge or lien on, and

(c)any set-off against,

the whole or part of a pension shall be disregarded.

(2)The same money may not be treated as providing both the increase in benefit required by this Chapter and the benefit required by Chapter III.

Modifications etc. (not altering text)

Commencement Information

I1Ss. 1-187 in force at 7.2.1994 by S.I. 1994/86, art. 2