The Social Security Revaluation of Earnings Factors Order 2001

Explanatory Note

(This note is not part of the Order)

This Order is made consequent upon a review under section 148 of the Social Security Administration Act 1992.

The Order directs that the earnings factors relevant to the calculation of the additional pension in the rate of any long-term benefit or of any guaranteed minimum pension, or to any other calculation required under Part III of the Pension Schemes Act 1993, are to be increased for the tax years specified in the Schedule to the Order by the percentage of their amount specified in that Schedule. The percentage specified in this Order for the tax year 2000–01 is also relevant for the purpose of revaluing state scheme pension credits in accordance with sections 45B, 55A and 55B of the Social Security Contributions and Benefis Act 1992. The percentage for the tax year 2000–01 is 4 per cent., and those for earlier tax years have been increased so that the earnings factors for those years are revalued at 2000–01 earnings levels.

The Order also provides for the rounding of fractional amounts for earnings factors relevant to the calculation of the additional pension in the rate of any long-term benefit. Rounding for the purpose of the calculation of any guaranteed minimum pension is not required by virtue of section 23(2) of the Social Security Contributions and Benefits Act 1992.

This Order does not impose any costs on business.