The Overseas Service (Pensions Supplement) (Amendment) Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend the Overseas Service (Pensions Supplement) Regulations 1995 (“the principal Regulations”), which provide for payment by the Secretary of State of inflation-proofing supplements on pensions paid to or in respect of certain officers who have served in overseas territories.

Under the principal Regulations the supplement is an amount (“the addition”) corresponding to the inflation-proofing increases which United Kingdom civil service pensioners receive under Part I of the Pensions (Increase) Act 1971, less an amount (“the total overseas increase”) being the sum of overseas increases, that is additions to the amount of the pension apart from supplement under the principal Regulations. Supplement is calculated on the basis of the “increasable rate” of the pension, usually the amount of pension first awarded.

Regulation 2 amends the principal Regulations to make clear that when an officer allocates part of his pension to provide a pension for a spouse or dependant after his death, so that the rate of his pension is reduced, supplement in respect of the officer’s pension will only be paid on the reduced rate.

Regulations 3, 4 and 5 amend the principal Regulations to provide that in calculating the total overseas increase there should, in the case of a pension payable in a currency other than sterling, be deducted any loss in the value of the increasable rate of the pension in sterling resulting from changes in exchange rates. This applies also to pensions payable in sterling but converted from another currency at a fluctuating exchange rate. The measure of loss is the difference between the sterling value of the increasable rate of the pension at current exchange rates and its sterling value at a fixed past exchange rate determined under regulation 22 of the principal Regulations.

Regulation 6 makes consequential provision for the circumstances when a person receives several pensions and the total amount of supplement on them is limited to the amount of supplement on a notional pension equal to the aggregate of those pensions. It provides that in calculating the total overseas increase on the notional pension the aggregate exchange rate losses on pensions comprised in the notional pension shall be deducted from the aggregate overseas increases on pensions so comprised.