SCHEDULE 2DETERMINATION OF ANNUAL AND INITIAL PAYMENTS
Active and deferred members4
1
F32
The annual payment payable to a qualifying member to whom this paragraph applies shall be—
F4.
3
In sub-paragraph (2), “expected pension” means, subject to F1sub-paragraphs (3A)F9... and (4)F21and paragraphs 4A and 4B, 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)); F10...
c
F25ca
in any case where the day—
i
on which the qualifying member attains normal retirement age; or
ii
from which the qualifying member becomes entitled to an annual payment in accordance with regulation 17(2), (3) or (3C) or 17C,
is on or after 31st March 2011, the revaluation amount for the third revaluation period (see sub-paragraphs (10A) and (11)); and
F123A
Where—
a
the annual rate of the pension determined for the purposes of sub-paragraph (3)(a) includes an amount which, under the rules of the qualifying pension scheme, was payable for a period which is shorter than the period in respect of which the remainder of the pension was payable; and
b
the liabilities of the scheme in respect of the beneficiary have been discharged (whether by the purchase of an annuity or by other means) in a manner which does not provide for a reduction in the annual rate of an annuity from the date on which the amount referred to in paragraph (a) would have ceased to be payable under the rules of the pension scheme,
the scheme manager shall determine the annual rate for the purposes of sub-paragraph (3)(a) having regard to the expected pension which would have been determined in accordance with paragraph 4A if that paragraph had applied and to such other matters as it considers relevant.
F133B
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4
In any case where the scheme manager is satisfied, having regard to the information available to F16it, that it is not possible for F16it to identify any one of the elements in F15sub-paragraph (3) or (3A) or paragraph 4BF14it may determine how the annual payment is to be calculated having regard to such matters as F14it considers relevant.
F55
The first revaluation period is the period—
a
beginning on the day on which the qualifying member’s pensionable service ended; and
b
ending on F17the day before the day on which the qualifying pension scheme began to be wound 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 F22or, where scheme rules are more favourable, in accordance with scheme rules.
F67
The second revaluation period is the period—
a
beginning on the day after the date determined in accordance with sub-paragraph (5)(b); and
F297A
The third revaluation period is the period beginning on 31st March 2011 and ending on—
a
the day on which the qualifying member attains normal retirement age; or
b
the day from which the qualifying member is entitled to an annual payment in accordance with regulation 17(2), (3) or (3C) or 17C,
whichever is the earlier.
8
The revaluation amount for the F30second and third revaluation periods is, subject to sub-paragraph (12)—
a
F31where the period—
i
determined in accordance with sub-paragraph (7) where sub-paragraph (3)(ca) does not apply; or
ii
covered by the second and third revaluation periods where sub-paragraph (3)(ca) applies,
is a period of 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
F32the percentage increase in the general level of prices during the second revaluation period or, where sub-paragraph (3)(ca) applies, the second and third revaluation periods determined in accordance with sub-paragraphs (7) and (7A) respectively; and
b
the maximum revaluation rate.
10
The method for determining the percentage increase in the general level of prices F23... 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 F19the F33last day of the revaluation period 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.
F3410A
The method for determining the percentage increase in the general level of prices during the third revaluation period is—
where—
- a
A is the general level of prices for the month which falls two months before the month in which the day on which the qualifying member is entitled to an annual payment falls; and
- b
B is the general level of prices for January 2011.
11
F35In sub-paragraph (9)(b), “the maximum revaluation rate” in relation to the second and third revaluation periods is—
a
5% if either—
i
sub-paragraph (3)(ca) does not apply and the period referred to in sub-paragraph (c) is a period of 12 months; or
ii
sub-paragraph (3)(ca) applies and the periods referred to in sub-paragraph (3)(c) and (ca) together form a period of 12 months; 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, whether determined in accordance with sub-paragraph (10) or (10A), increased at the rate of 5% compound per annum during those periods.
12
In determining the revaluation amount for the second F36or third 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.
13
a
beginning on the day after the day on which the member attained normal retirement age; and
b
ending on 14 May 2004.
F2013A
The revaluation amount for the F38fourth revaluation period is—
a
where that period is less than one month, nil; or
b
in any other case, the revaluation percentage of the aggregate of—
i
the annual rate of the pension under sub-paragraph (3)(a);
ii
the revaluation amount for the first revaluation period under sub-paragraph (6); and
iii
the revaluation amount for the second revaluation period under sub-paragraph (8).
13B
In sub-paragraph (13A), “the revaluation percentage” means the lesser of—
a
the percentage increase in the general level of prices F23... during the revaluation period determined in accordance with sub-paragraph (13); and
b
the maximum revaluation rate.
13C
The method for determining the percentage increase in the general level of prices F23... during the revaluation period determined in accordance with sub-paragraph (13) is—
where—
A is the level of the retail prices index for March 2004; and
B is the level of the retail prices index for the month two months before the month in which the qualifying member attained normal retirement age.
13D
In sub-paragraph (13B)(b), “the maximum revaluation rate” in relation to the 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 (13B)(a) had the general level of prices F23... increased at the rate of 5% compound per annum during that period.