The Railway Pensions (Substitution) Order 1994

Explanatory Note

(This note is not part of the Order)

This Order terminates the liability of the Secretary of State to make payments under section 52(1) of the Transport Act 1980 in respect of two sections of the Railways Pension Scheme, and makes provision for payments to be made in substitution for that liability.

It specifies 13th October 1994 as the termination date in respect of each section, that is, the date on which the liability of the Secretary of State to make payments under section 52(1) is to be terminated (articles 2 and 4).

It specifies the capital value of the unfunded obligations (as defined in section 52B of the Transport Act 1980) in respect of each of the sections as at the termination date (articles 3 and 5).

Schedules 1 and 2 require the Secretary of State to make payments in respect of the capital values of the unfunded obligations and provide for the accrual and payment of interest on the outstanding balances of those capital values. Schedule 1 makes such provision in respect of one half of the total of the capital values and Schedule 2 in respect of the remaining half.

The Order also provides for the liability of the Secretary of State to make payments under Schedules 1 and 2 to be discharged in the event of the winding up of both sections (article 7).

This Order does not impose any costs on business.