Modifications etc. (not altering text)
C1Sch. 32 modified (6.4.2006) by The Pensions Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006 (S.I. 2006/207), regs. 1(1), 16
C2Sch. 32 applied (6.4.2006) by The Pension Protection Fund (Tax) Regulations 2006 (S.I. 2006/575), regs. 1, 23(5)
13(1)For the purposes of benefit crystallisation event 3 “XP” is (subject to sub-paragraph (2)) the amount by which—U.K.
(a)the increased annual rate of the pension, exceeds
(b)the rate at which it was payable on the day on which the individual became entitled to it, as increased by the permitted margin.
[F1(2)But if one or more benefit crystallisation events has or have previously occurred by reason of the individual having become entitled to payment of the pension at an increased rate, XP does not include the amount of XP on that event or the aggregate of the amounts of XP on those events.
(2A)For the purposes of sub-paragraph (2), the amount of XP on a previous benefit crystallisation event is to be increased by whichever of calculation A and calculation B gives the greater amount.
(2B)Calculation A involves increasing the amount of XP on the previous event at the relevant annual percentage rate for the whole of the period—
(a)beginning with the month in which the previous event occurred, and
(b)ending with the month in which the individual becomes entitled to payment of the pension at the increased rate.
(2C)The relevant annual percentage rate has the same meaning as in paragraph 11(4).
(2D)Calculation B involves increasing the amount of XP on the previous event by the relevant indexation percentage.
(2E)The relevant indexation percentage is—
(a)if the retail prices index for the reference month is higher than the retail prices index for the base month, the percentage increase in the retail prices index, and
(b)if it is not, 0%.
(2F)The scheme administrator may select as the reference month any month in the period of 12 months ending with the month in which the individual becomes entitled to payment of the pension at the increased rate.
(2G)The base month is the month which is the same number of months before the month in which the previous event occurred, as the reference month is before the month in which the individual becomes entitled to payment of the pension at the increased rate.]
[F2(3)If the pension is under a public service pension scheme, any abatement of the pension is to be left out of account in determining for the purposes of sub-paragraph (1)—
(a)the increased annual rate of the pension, and
(b)the rate at which it was payable on the day on which the individual became entitled to it.]
[F3(4)If the rate at which the pension is payable is reduced so as to reflect the amount of any tax under section 215 to be paid by the scheme administrator, that reduction is to be left out of account in determining the rate at which the pension is payable for the purposes of sub-paragraph (1)(a).
(5)And if the reduction is such that, in accordance with normal actuarial practice, it would be taken fully to reflect the amount of the tax, the tax is not to be treated as tax paid by the scheme administrator for the purposes of section 215(9).]
Textual Amendments
F1Sch. 32 para. 13(2)-(2G) substituted for Sch. 32 para. 13(2) (retrospective and with effect in accordance with Sch. 29 para. 12(2) of the amending Act) by Finance Act 2008 (c. 9), Sch. 29 paras. 10, 12(3)
F2Sch. 32 para. 13(3) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 8(6), 64(1)
F3Sch. 32 para. 13(4)(5) inserted (6.4.2006) by Finance Act 2005 (c. 7), Sch. 10 paras. 43(5), 64(1)
Modifications etc. (not altering text)
C3Sch. 32 para. 13(4)(5) modified (6.4.2006) by The Registered Pension Schemes (Splitting of Schemes) Regulations 2006 (S.I. 2006/569), regs. 1(1), 3(1)(2), Sch. 3 Pt. 1
Commencement Information
I1Ss. 160-274, 281, Schs. 30-35 in force at 6.4.2006 but any power to make an order or regulations under those provisions may be exercised at any time after Royal Assent, see s. 284