Social Security Pensions Act 1975

37 Earner's salary as factor of widow's pension

(1) The following additional provisions apply as to a scheme's compliance with section 36 above.

(2) If the scheme provides for the annual rate of the widow's pension to be calculated by reference to the earner's average annual salary—

(a) the method of computing average annual salary must be approved by the Occupational Pensions Board ; and

(b) the scheme must provide that earnings for any period falling within any tax year shall, for the purposes of the calculation, be treated as increased by the same percentage as that prescribed for the increase of earnings factors for that year.

(3) In subsection (2)(b) above, " prescribed " means prescribed by any order or orders coming into force under section 21 above before whichever is the earliest of the following events, namely—

(a) termination of the earner's service in the relevant employment;

(b) his attaining the scheme's normal pension age ;

(c) his death.

(4) Where the scheme provides for the annual rate of the widow's pension to be calculated by reference to the earner's final salary (or last salary before death)—

(a) the method of ascertaining final or last salary ; and

(b) the scheme's provisions for calculating the rate of pension by reference to it,

must be approved by the Board.

(5) In deciding whether or not to give their approval under subsection (4)(b) above the Board shall have regard to any aspects of the scheme which appear to them to be relevant, but in particular—

(a) to the interval (if any) between the end of the period by reference to which final or last salary is to be determined and the scheme's normal pension age or, as the case may be, the date of the earner's death ; and

(b) to what provision (if any) is made for revaluing the salary during any such interval.

(6) Subject to the foregoing provisions, the scheme may provide—

(a) for excluding earnings of any kind from the salary by reference to which the annual rate of the widow's pension is to be calculated ; and

(b) for excluding any amount of earnings of the kind that are to constitute that salary except so much (if any) as would, if expressed as a weekly rate, exceed one and a half times the lower earnings limit but would not exceed the upper earnings limit;

and if the salary is to include the amount of earnings up to one and a half times the lower earnings limit the scheme may provide for reducing the rate of pension to what it would have been if that amount had been excluded.

(7) In subsection (6) above references to the lower and upper earnings limits, in relation to any earnings, are references to those limits as in force when the earnings are paid.