Pension Schemes Act 1993

Changes over time for: Section 84

Version Superseded: 01/08/2022

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Point in time view as at 11/02/2021. This version of this provision has been superseded.

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Pension Schemes Act 1993, Section 84 is up to date with all changes known to be in force on or before 18 November 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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84 Basis of revaluation.E+W+S

(1)[F1Subject to subsections (2) to (3B)], in the case of such benefits as are mentioned in section 83(1)(a), any pension or other retirement benefit payable under the scheme in question to the member and any pension or other benefit payable under it to any other person in respect of him, is to be revalued by the final salary method.

(2)If—

(a)any such benefit is an average salary benefit or flat rate benefit; and

(b)it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue the benefit by the average salary method or, as the case may be, the flat rate method,

then the benefit shall be revalued using that method.

(3)If any benefit such as is mentioned in paragraph (a) of section 83(1) is a money purchase benefit [F2other than a collective money purchase benefit], and in the case of such benefit as is mentioned in paragraph (b) of that section, the benefit shall be revalued using the money purchase method.

[F3(3A)If—

(a)any such benefit as is mentioned in section 83(1)(a) is a cash balance benefit in respect of which the available sum is not calculated by reference to final salary;

(b)the benefit is attributable to periods of pensionable service falling on or after the day on which section 29 of the Pensions Act 2011 (definition of money purchase benefits) comes into force; and

(c)it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue the benefit by the cash balance method,

then the benefit shall be revalued using that method.

[F4(3AA)If any such benefit as is mentioned in section 83(1)(a) is a collective money purchase benefit, the benefit shall be revalued using the cash balance method.]

(3B)Where a cash balance benefit in respect of which the available sum is not calculated by reference to final salary—

(a)is attributable to periods of pensionable service falling partly before and partly on or after the day on which section 29 of that Act comes into force; and

(b)it appears to the trustees or managers of the scheme under which it is payable that it is appropriate to revalue so much of the benefit as is attributable to the member’s pensionable service falling on or after that day by the cash balance method,

then so much of the benefit as is attributable to the member’s pensionable service falling on or after that day shall be revalued using that method.]

(4)In this section—

“average salary benefit” means benefit the rate or amount of which is calculated by reference to the average salary of a member over the period of service on which the benefit is based;
[F5“cash balance benefit” has the meaning given by regulation 2 of the Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014;]
[F5“final salary”, in relation to a member to or in respect of whom benefits under a pension scheme are payable, means the member’s pensionable earnings, or highest, average or representative pensionable earnings, in a specified period ending at, or defined by reference to, the time when the member’s pensionable service in relation to that scheme ends;]
“flat rate benefit” means any benefit the rate or amount of which is calculated by reference solely to the member’s length of service;
“average salary method”, [F6“cash balance method”,] “final salary method”, “flat rate method” and “money purchase method” have the meanings given in Schedule 3.
[F7“pensionable earnings”, in relation to a member of a pension scheme, means earnings by reference to which benefits under the scheme are calculated.]

(5)The fact that a scheme provides for the amount of the pension or other benefit for a member or for any other person in respect of him to be increased during the pre-pension period—

(a)by the percentages specified during that period under section 151(1) of the M1Social Security Administration Act 1992 (directions specifying percentage increases for up-rating purposes); F8... [F9or

(b)under any arrangement which [F10, in the opinion of the Secretary of State, maintains the value of the pension or other benefit by reference to the rise in the general level of prices in Great Britain] during that period,]

does not in itself result in conflict with this section, if the increase falls to be determined by reference to an amount from which the guaranteed minimum for a member or a member’s [F11widow, widower [F12, surviving same sex spouse] or surviving civil partner] has not been deducted.

F13(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1Words in s. 84(1) substituted (24.7.2014) by The Pensions Act 2011(Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1954), regs. 1(2), 3(2)(a) (with reg. 2)

F2Words in s. 84(3) inserted (11.2.2021 for specified purposes) by Pension Schemes Act 2021 (c. 1), s. 131(1)(3)(a), Sch. 3 para. 2(2)

F3S. 84(3A)(3B) inserted (24.7.2014) by The Pensions Act 2011(Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1954), regs. 1(2), 3(2)(b) (with reg. 2)

F4S. 84(3AA) inserted (11.2.2021 for specified purposes) by Pension Schemes Act 2021 (c. 1), s. 131(1)(3)(a), Sch. 3 para. 2(3)

F5Words in s. 84(4) inserted (24.7.2014) by The Pensions Act 2011(Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1954), regs. 1(2), 3(2)(c)(i) (with reg. 2)

F6Words in s. 84(4) inserted (24.7.2014) by The Pensions Act 2011(Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1954), regs. 1(2), 3(2)(c)(ii) (with reg. 2)

F7Words in s. 84(4) inserted (24.7.2014) by The Pensions Act 2011(Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1954), regs. 1(2), 3(2)(c)(iii) (with reg. 2)

F8Words in s. 84(5) repealed (6.4.1997) by Pensions Act 1995 (c. 26), s. 180(1), Sch. 5 para. 62, Sch. 7 Pt. III; S.I. 1997/664, art. 2(3), Sch. Pt. 2

F9S. 84(5)(b) and word inserted (18.11.2004) by Pensions Act 2004 (c. 35), ss. 281(2), 322(2)(b) (with s. 313)

F10Words in s. 84(5)(b) substituted (3.1.2012) by Pensions Act 2011 (c. 19), ss. 19(2), 38(4); S.I. 2011/3034, art. 3(b)