Pensions Act 2004

5 (1) Compensation is payable in accordance with this paragraph where immediately before the assessment date— E+W+S

(a) a person is entitled to present payment of a pension under the admissible rules of the scheme,

(b) payment of that pension is postponed, and

(c) he has attained normal pension age in relation to the pension.

(2) That person (“the postponed pensioner”) is entitled to periodic compensation in respect of that pension (“the pension”) commencing at the assessment date and continuing for life or, in a case to which sub-paragraph (7) applies, until such time as entitlement to the pension would have ceased under the admissible rules.

(3) The annual rate of the periodic compensation is 100% of the aggregate of—

(a) the protected pension rate, F1 ...

[F2 (aa) if the commencement of periodic compensation under this paragraph has been postponed for any period by virtue of paragraph 25A, the amount of the actuarial increase under that paragraph, and]

(b) any increases under paragraph 28 (annual increases in periodic compensation).

(4) In sub-paragraph (3) “the protected pension rate” means what would have been the annual rate of the pension, under the admissible rules, if the postponement of payment had ceased immediately before the assessment date.

(5) In determining for the purposes of sub-paragraph (4) the annual rate of the pension immediately before the assessment date, any recent discretionary increase is to be disregarded if paragraph [F3 35(3A)] applies [F4 to the scheme] .

(6) Where the pension is attributable (directly or indirectly) to a pension credit, the reference in sub-paragraph (1)(c) to “normal pension age” is to be read as a reference to “normal benefit age”.

(7) This sub-paragraph applies where the pension was not attributable—

(a) to the postponed pensioner’s pensionable service, or

(b) (directly or indirectly) to a pension credit to which the postponed pensioner became entitled under section 29(1)(b) of the Welfare Reform and Pensions Act 1999 (c. 30).

(8) This paragraph is subject to—

• paragraph 24 (commutation), and

• paragraph 30 (power of Secretary of State to change percentage rates by order).

Textual Amendments

F1 Word in Sch. 7 para. 5(3)(a) omitted (13.3.2013) by virtue of Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 23(1)(a); S.I. 2013/585, art. 2(b)(ii)

F2 Sch. 7 para. 5(3)(aa) inserted (13.3.2013) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 23(1)(b); S.I. 2013/585, art. 2(b)(ii)

F3 Word in Sch. 7 para. 5(5) substituted (3.1.2012) by Pensions Act 2011 (c. 19), s. 38(4), Sch. 4 para. 37(3); S.I. 2011/3034, art. 3(i)(v)

F4 Words in Sch. 7 para. 5(5) added (1.4.2009) by Pensions Act 2008 (c. 30), s. 149(1), Sch. 8 para. 3; S.I. 2009/809, art. 2(1)(b)(i)

Modifications etc. (not altering text)

C1 Sch. 7 para. 5 modified (6.4.2005) by The Pension Protection Fund (Compensation) Regulations 2005 (S.I. 2005/670), regs. 1(1), 25(2)(a) (with reg. 23(3)) (as amended (24.7.2014) by The Pensions Act 2011 (Transitional, Consequential and Supplementary Provisions) Regulations 2014 (S.I. 2014/1711), regs. 1(1), 60(5)(c) (with regs. 6, 41, 44(1), 47(1), 69(2), 72(1), 76(1)); coming into force immediately after s. 29 of 2011 c 19 - see S.I. 2014/1683, art. 2)

C2 Sch. 7 modified (6.4.2005) by The Pension Protection Fund (Reviewable Ill Health Pensions) Regulations 2005 (S.I. 2005/652), regs. 1(1), 15

C3 Sch. 7 applied (with modifications) (6.4.2005) by The Pension Protection Fund (Reviewable Ill Health Pensions) Regulations 2005 (S.I. 2005/652), regs. 1(1), 14(2)

C4 Sch. 7 modified (6.4.2005) by The Pension Protection Fund (Compensation) Regulations 2005 (S.I. 2005/670), regs. 1(1), 12 (with reg. 23(3))

C5 Sch. 7 applied (with modifications) (6.4.2005) by The Pension Protection Fund (Hybrid Schemes) (Modification) Regulations 2005 (S.I. 2005/449), regs. 1(1), 3(2)-(4)

C6 Sch. 7 applied (with modifications) (6.4.2005) by The Pension Protection Fund (Reviewable Ill Health Pensions) Regulations 2005 (S.I. 2005/652), regs. 1(1), 13(1)

Commencement Information

I1 Sch. 7 para. 5 in so far as not already in force (6.4.2005) by S.I. 2005/275, art. 2(7), Sch. Pt. 7