Pensions Act 2008

Part 2Revaluation of accrued amounts etc

Amendments to Schedule 7 to the 2004 Act

4This Part makes amendments to Schedule 7 to the Pensions Act 2004 (c. 35) (pension compensation provisions).

5(1)Paragraph 12 (active members who have not attained normal pension age at assessment date: the revaluation amount for the revaluation period) is amended as follows.

(2)In sub-paragraph (3), for paragraph (b) substitute—

“(b)in any other case, the aggregate of—

(i)the higher revaluation percentage of so much of the accrued amount as is attributable to the active member’s pensionable service falling before the day on which section 101 of the Pensions Act 2008 comes into force (“the 2008 Act commencement day”), and

(ii)the lower revaluation percentage of so much of the accrued amount as is attributable to the active member’s pensionable service falling on or after that day.”

(3)After sub-paragraph (3) insert—

“(3A)For the purposes of sub-paragraph (3)(b)—

(a)any service within paragraph 36(4)(b) (notional pensionable service) is to be treated as falling on or after the 2008 Act commencement day if, or to the extent that, it is so treated for the purposes of the scheme;

(b)regulations may make provision in relation to cases where it is unclear whether or not any particular pensionable service (either actual or notional) falls, or is to be treated as falling, on or after that day.”

(4)For sub-paragraphs (4) and (5) substitute—

“(4)In sub-paragraph (3)(b)—

• “the higher 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 the prescribed manner (“the inflation percentage”), and

  (b)

  the higher maximum revaluation rate;

• “the lower revaluation percentage” means the lesser of—

  (a)

  the inflation percentage, and

  (b)

  the lower maximum revaluation rate.

(5)For the purposes of sub-paragraph (4)—

• “the higher maximum revaluation rate”, in relation to the revaluation period, is—

  (a)

  if that period is a period of 12 months, 5%, and

  (b)

  in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period;

• “the lower maximum revaluation rate”, in relation to the revaluation period, is—

  (a)

  if that period is a period of 12 months, 2.5%, and

  (b)

  in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 2.5% compound per annum during that period.

This is subject to paragraph 29 (power of Board to determine maximum revaluation rates etc).”

6(1)Paragraph 17 (deferred members who have not attained normal pension age at assessment date: the revaluation amount for the second revaluation period) is amended as follows.

(2)In sub-paragraph (3), for paragraph (b) substitute—

“(b)in any other case, the aggregate of—

(i)the higher revaluation percentage of so much of the relevant amount as is attributable to the deferred member’s pensionable service falling before the day on which section 101 of the Pensions Act 2008 comes into force (“the 2008 Act commencement day”), and

(ii)the lower revaluation percentage of so much of the relevant amount as is attributable to the deferred member’s pensionable service falling on or after that day.”

(3)After sub-paragraph (3) insert—

“(3A)For the purposes of sub-paragraph (3)(b)—

(a)any service within paragraph 36(4)(b) (notional pensionable service) is to be treated as falling on or after the 2008 Act commencement day if, or to the extent that, it is so treated for the purposes of the scheme;

(b)regulations may make provision in relation to cases where it is unclear whether or not any particular pensionable service (either actual or notional) falls, or is to be treated as falling, on or after that day.”

(4)For sub-paragraphs (4) and (5) substitute—

“(4)In sub-paragraph (3)—

• “the higher 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 the prescribed manner (“the inflation percentage”), and

  (b)

  the higher maximum revaluation rate;

• “the lower revaluation percentage” means the lesser of—

  (a)

  the inflation percentage, and

  (b)

  the lower maximum revaluation rate;

• “the relevant amount” means the aggregate of—

  (a)

  the accrued amount, and

  (b)

  the revaluation amount for the first revaluation period (see paragraph 16).

(5)For the purposes of sub-paragraph (3)—

• “the higher maximum revaluation rate”, in relation to the second revaluation period, is—

  (a)

  if that period is a period of 12 months, 5%, and

  (b)

  in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period;

• “the lower maximum revaluation rate”, in relation to the second revaluation period, is—

  (a)

  if that period is a period of 12 months, 2.5%, and

  (b)

  in any other case, the percentage that would be the inflation percentage had the general level of prices in Great Britain increased at the rate of 2.5% compound per annum during that period.

This is subject to paragraph 29 (power of Board to determine maximum revaluation rates etc).”

7In paragraph 29 (Board’s powers to alter rates of revaluation etc), for sub-paragraph (1) substitute—

“(1)The Board may determine what is to be the higher maximum revaluation rate or the lower maximum revaluation rate for the purposes of paragraphs 12(4) and 17(4), and where it does so the relevant definitions in paragraphs 12(5) and 17(5) do not apply.”