Pension Schemes Act 1993

The revaluation percentage and the appropriate revaluation percentage

2 (1) For the purposes of paragraph 1 the Secretary of State shall in each calendar year by order specify a revaluation percentage for each period which is a revaluation period in relation to that order.

(2) A period is a “revaluation period”, in relation to an order under this paragraph, if it is a period which—

(a) begins with 1st January 1986 or with an anniversary of that date falling before the making of the order; and

(b) ends with the next day after the making of the order which is 31st December.

(3) The revaluation percentage which the Secretary of State is to specify in relation to each revaluation period is—

(a) the percentage which appears to him to be the percentage increase in the general level of prices in Great Britain during the period which is the reference period in relation to that revaluation period; or

(b) the maximum rate,

whichever is the less.

(4) The Secretary of State may estimate the percentage increase mentioned in sub-paragraph (3)(a) in such manner as he thinks fit.

(5) For the purposes of that sub-paragraph, the reference period in relation to a revaluation period is—

(a) in the case of the revaluation period beginning on 1st January 1986, the period which begins with 1st October 1985 and ends with the last day before the making of the order which is 30th September; and

(b) in the case of the revaluation periods with later commencement dates, the period which—

(i) begins with the last day before the commencement of the revaluation period which is 1st October; and

(ii) ends with the last day before the making of the order which is 30th September.

(6) For the purposes of sub-paragraph (3)(b) “the maximum rate”, in relation to a revaluation period, is—

(a) in the case of a revaluation period of 12 months, 5 per cent.; and

(b) in any other case, the percentage that would be the revaluation percentage had the general level of prices increased at the rate of 5 per cent. compound per annum during the reference period in question.

(7) In paragraph 1 “the appropriate revaluation percentage” means the revaluation percentage specified in the last calendar year before the date on which the member attains normal pension age as the revaluation percentage for the revaluation period which is of the same length as the number of complete years in the pre-pension period.