3

Subject to sub-paragraphs (4) and (5) and paragraphs 4A and 4B, in this paragraph “expected pension” means—

a

the annual rate of the pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme as at the day before the day on which the qualifying pension scheme began to be wound up; or

b

where the day on which the qualifying pension scheme began to be wound up is earlier than 14 May 2004, the aggregate of—

i

the annual rate of the pension which was or should have been in payment to the qualifying member in accordance with the scheme rules in respect of rights accrued in a qualifying pension scheme as at the day on which the qualifying pension scheme began to be wound up; and

ii

the revaluation amount for the period beginning on the day on which the qualifying pension scheme began to be wound up and ending on 14 May 2004.

3A

In sub-paragraph (3)(b)(ii), the revaluation amount is—

a

where that period is less than one month, nil; or

b

in any other case, the revaluation percentage of the amount of the annual rate of pension under sub-paragraph (3)(b)(i).

3B

In sub-paragraph (3A), “the revaluation percentage” means the lesser of—

a

the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (3)(b)(ii); and

b

the maximum revaluation rate.

3C

The method for determining the percentage increase in the general level of prices in Great Britain during the revaluation period determined in accordance with sub-paragraph (3)(b)(ii) is—

$$\left(100\times \left(A÷B\right)\right)-100$$

where—

• A is the level of the retail prices index for March 2004; and

• B is the level of the retail prices index for the month two months before the month during which the relevant qualifying pension scheme began to be wound up.

3D

In sub-paragraph (3B)(b), “the maximum revaluation rate” in relation to the revaluation period is—

a

if that period is a period of 12 months, 5%; or

b

in any other case, the percentage that would be the percentage mentioned in sub-paragraph (3B)(a) had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period.

5

Where—

a

the annual rate of the pension determined for the purposes of calculating the expected pension under sub-paragraph (2) includes an amount which, under the rules of the qualifying pension scheme, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and

b

the liabilities of the scheme in respect of the beneficiary have been discharged (whether by the purchase of an annuity or by other means) in a manner which does not provide for a reduction in the annual rate of an annuity from the date on which the amount referred to in paragraph (a) would have ceased to be payable under the rules of the pension scheme,

the scheme manager shall determine the expected pension having regard to the expected pension which would have been determined in accordance with paragraph 4A if that paragraph had applied and to such other matters as it considers relevant.