Restriction on average salaryE+W+S
39.—(1) This regulation applies for calculating the average salary of a person (P), except where P dies in pensionable employment.
(2) For the purpose of regulation 37(2)(a)—
(a)if P's relevant salary during the last 365 days of P's average salary service is greater than RS2 + I, P is to be treated as receiving relevant salary during that period of an amount equal to RS2 + I;
(b)where P has more than 730 days of average salary service, if P's relevant salary during Year 2 is greater than RS1 + I, P is to be treated as receiving relevant salary during Year 2 of an amount equal to RS1 + I;
(c)where P has more than 1095 days of average salary service, if P's relevant salary during Year 1 is greater than RS0 + I, P is to be treated as receiving relevant salary during Year 1 of an amount equal to RS0 + I.
(3) In paragraph (2)— I is the greater of—
(a)the fixed amount—
(i)determined in accordance with paragraph (4) (where the last day of P's average salary service falls before 31st March 2011 ), or
(ii)relating to the financial year in which the last day of P's average salary service falls, determined in accordance with paragraph (5), in any other case, and
(b)10% of the annual rate of the salary to which I is added;
RS0 is the average annual rate of P's relevant salary during Year 0; RS1 is the average annual rate of P's relevant salary during Year 1 or, where paragraph (2)(c) applies, the relevant salary during Year 1 which P is to be treated as receiving in accordance with that sub-paragraph; RS2 is the average annual rate of P's relevant salary during Year 2 or, where paragraph (2)(b) applies, the relevant salary during Year 2 which P is to be treated as receiving in accordance with that sub-paragraph.
(4) The fixed amount where the last day of P's average salary service falls before 31st March 2011 is £ 5,000.
(5) The fixed amount where the last day of P's average salary service falls in the financial year ending on 31st March 2012 or any subsequent financial year is the fixed amount relating to the financial year before that financial year (“the previous financial year”) multiplied by the factor mentioned in paragraph (6), if that factor is greater than 1, rounded to the nearest £100 (and for the purpose of this paragraph £5,000 is to be treated as the fixed amount relating to the financial year ending on 31st March 2011).
(6) The factor is RPI1/RPI2, where—
(7) RPI 1 is the retail prices index for February in the previous financial year, and
(8) RPI 2 is the retail prices index for February in the financial year before the previous financial year.
(9) This regulation is subject to paragraph 23 of Schedule 13.
(10) In this regulation—
“Year 0” means the 365 days of P's average salary service preceding Year 1 or, where P has less than 1,460 days of average salary service, the number of days of P's average salary service preceding Year 1;
“Year 1” means the 365 days of P's average salary service preceding Year 2 or, where P has less than 1,095 days of average salary service, the number of days of P's average salary service preceding Year 2;
“Year 2” means the 365 days of P's average salary service preceding the last 365 days of P's average salary service or, where P has less than 730 days of average salary service, the number of days of P's average salary service preceding the last 365 days of P's average salary service.