The Pensions (Northern Ireland) Order 1995

Annual increase in rate of pension N.I.

51 .—(1) Subject to paragraph (6), this Article applies to a pension under an occupational pension scheme if—

(a) the scheme—

[F1 (i) is a registered pension scheme under section 153 of the Finance Act 2004, and ]

(ii) is not a public service pension scheme, and

[F2 (iii) in the case where the pension becomes a pension in payment on or after the commencement day, is not a money purchase scheme, and]

[F2 (b) the whole, or any part of, the pension is attributable—

(i) to pensionable service on or after the appointed day, or

(ii) in the case of money purchase benefits where the pension is in payment before the commencement day, to payments in respect of employment carried on on or after the appointed day, and

(c) apart from this Article—

(i) the annual rate of the pension, or

(ii) if only part of the pension is attributable as described in sub-paragraph (b), so much of the annual rate as is attributable to that part,

would not be increased each year by at least the appropriate percentage of that rate.]

(2) [F3 Subject to Articles 51A and 52], where a pension to which this Article applies, or any part of it, is attributable to pensionable service on or after the appointed day or, in the case of money purchase benefits[F2 where the pension is in payment before the commencement day], to payments in respect of employment carried on or after the appointed day—

(a) the annual rate of the pension, or

(b) if only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after the appointed day, so much of the annual rate as is attributable to that part,

must be increased annually by at least the appropriate percentage.

(3) Paragraph (2) does not apply to a pension under an occupational pension scheme if the rules of the scheme require—

(a) the annual rate of the pension, or

(b) if only part of the pension is attributable to pensionable service or, as the case may be, to payments in respect of employment carried on on or after the appointed day, so much of the annual rate as is attributable to that part,

to be increased at intervals of not more than twelve months by at least the relevant percentage and the scheme complies with any prescribed requirements.

(4) For the purposes of paragraph (3) the relevant percentage is—

(a) the percentage increase in the retail prices index for the reference period, being a period determined, in relation to each periodical increase under the rules, or

(b) the percentage for that period which corresponds toF2

[F2 (i) in the case of a category X pension, 5 per cent. per annum, and

(ii) in the case of a category Y pension, 2.5 per cent. per annum.,]

whichever is the lesser.

[F2 (4A) For the purposes of this Article, a pension is a category X pension if it is—

(a) a pension which became a pension in payment before the commencement day, or

(b) a pension—

(i) which becomes a pension in payment on or after the commencement day, and

(ii) the whole of which is attributable to pensionable service before that day.

(4B) For the purposes of this Article, a pension is a category Y pension if it is a pension—

(a) which becomes a pension in payment on or after the commencement day, and

(b) the whole of which is attributable to pensionable service on or after the commencement day.

(4C) For the purposes of applying this Article in the case of a pension—

(a) which becomes a pension in payment on or after the commencement day,

(b) part of which is attributable to pensionable service before the commencement day, and

(c) part of which is attributable to pensionable service on or after that day,

each of those parts of the pension is to be treated as if it were a separate pension.]

(5) Regulations may provide that[F2 any of the provisions of this Article] apply in relation to a pension as if so much of it as would not otherwise be attributable to pensionable service or to payments in respect of employment were attributable to pensionable service or, as the case may be, payments in respect of employment—

(a) before the appointed day[F2 or the commencement day],

(b) on or after that day, or

(c) partly before and partly on or after that day.

(6) This Article does not apply to any pension or part of a pension[F4 which is attributable (directly or indirectly) to a pension credit or] which, in the opinion of the trustees or managers, is derived from the payment by any member of the scheme of voluntary contributions.

F1 Art. 51(1)(a)(i) substituted (6.4.2006) by Taxation of Pension Schemes (Consequential Amendments) Order 2006 (S.I. 2006/745), art. 11(2)

F2 2005 NI 1

F3 2000 c. 4 (NI)

F4 1999 NI 11

Modifications etc. (not altering text)

C1 mod. by SR 2005/170