SCHEDULE 2U.K.DETERMINATION OF ANNUAL AND INITIAL PAYMENTS

Active and deferred membersU.K.

4.—(1) This paragraph applies in respect of a qualifying member of a qualifying pension scheme who F1... was an active member or a deferred member of that scheme [F2on the crystallisation date].

[F3(2) The annual payment payable to a qualifying member to whom this paragraph applies shall be—

.]

(3) In sub-paragraph (2), “expected pension” means, subject to [F4sub-paragraphs (3A), (3B) and (4)], the aggregate of—

(a)the annual rate of the pension to which the qualifying member would have been entitled in accordance with the scheme rules had he attained his normal retirement age when the pensionable service relating to the pension ended;

(b)the revaluation amount for the first revaluation period (see sub-paragraphs (5) and (6)); and

(c)the revaluation amount for the second revaluation period (see sub-paragraphs (7) to (11)).

[F5(3A) In a case to which sub-paragraph (13) applies, “expected pension” means, subject to sub-paragraph (4), the aggregate of the amount specified in sub-paragraph (3)(a) and the revaluation amount for the revaluation period specified in sub-paragraph (13).

(3B) In a case where the certification date is on or before the day on which the qualifying member’s pensionable service ended, “expected pension” means, subject to sub-paragraph (4), the amount specified in sub-paragraph (3)(a).]

(4) In any case where the scheme manager is satisfied, having regard to the information available to him, that it is not possible for him to identify any one of the elements in sub-paragraph (3), [F6(3A) or (3B),] he may determine how the annual payment is to be calculated having regard to such matters as he considers relevant.

(5) The first revaluation period is the period beginning on the day on which the qualifying member's pensionable service ended and ending on the day before the day on which the scheme began to wind up.

(6) The revaluation amount for the first revaluation period is the amount by which the annual rate of the pension under sub-paragraph (3)(a) would fall to be revalued—

(a)in relation to any guaranteed minimum pension, in accordance with section 16 of the 1993 Act, having regard to the relevant scheme rules; and

(b)in relation to the remainder of the pension, in accordance with Chapter 2 of Part 4 of the 1993 Act.

(7) The second revaluation period is the period beginning on the day on which the scheme began to wind up and ending on the certification date.

(8) The revaluation amount for the second revaluation period is, subject to sub-paragraph (12)—

(a)where that period is less than one month, nil; or

(b)in any other case, the revaluation percentage of the aggregate of the annual rate of the pension under sub-paragraph (3)(a) and the revaluation amount for the first revaluation period under sub-paragraph (6).

(9) In sub-paragraph (8), “the revaluation percentage” means the lesser of—

(a)the percentage increase in the general level of prices in Great Britain during the second revaluation period determined in accordance with sub-paragraph (7); and

(b)the maximum revaluation rate.

(10) The method for determining the percentage increase in the general level of prices in Great Britain during the second revaluation period is—

where—

A is the level of the retail prices index for the month which falls two months before the month in which the certification date falls;

B is the level of the retail prices index for the month two months before the month during which the relevant qualifying pension scheme began to wind up.

(11) In sub-paragraph (9)(b), “the maximum revaluation rate” in relation to the second revaluation period is—

(a)if that period is a period of 12 months, 5%; or

(b)in any other case, the percentage that would be the percentage mentioned in sub-paragraph (9)(a) had the general level of prices in Great Britain increased at the rate of 5% compound per annum during that period.

(12) In determining the revaluation amount for the second revaluation period in accordance with sub-paragraphs (8) to (11), no revaluation shall be made in respect of any benefits which are not subject to revaluation under the scheme rules.

[F7(13) This sub-paragraph applies to a case where the certification date falls before the day on which the scheme began to wind up, and in such a case—

(a)the revaluation period is the period beginning on the day on which the qualifying member’s pensionable service ended and ending on the certification date; and

(b)the revaluation amount for the period specified in paragraph (a) shall be calculated in accordance with sub-paragraph (6)(a) and (b).]

Textual Amendments