Explanatory note

This Order amends the European Parliamentary (United Kingdom Representatives) Pensions (Consolidation and Amendment) Order 1994, improving the accrual rate for service as a Representative before 20th July 1983 from sixtieths to fiftieths for Representatives in service on 1st April 1995 and changing the provisions relating to gratuities payable in respect of Representatives who die in service on or after that date.

There are a number of consequential amendments arising from the improvement in the accrual rate. By virtue of article 3, dual-mandate service, added years purchased and transfer values brought into the scheme which have been treated as service before 20th July 1983 are revalued. Added years purchased at 40% of cost pursuant to provisions introduced in 1984 when the accrual rate was first improved from 60ths to 50ths are reduced to reflect the value of the contributions paid. The Schedule provides for refunds of contributions and for the adjustment of current contracts to buy added years where these are necessary to prevent a Representative’s pension from exceeding Inland Revenue limits.

Regulation 6 provides for the amount of the death in service gratuity which may be paid under the scheme in respect of any participant in service on or after 1st April 1995 to be increased to three times his pensionable salary at the time of death.

A participant in the scheme may nominate more than one person to receive the gratuity, and the persons nominated may include any institution or trust. If a nomination lapses in part because, for example, the person nominated was the participant’s spouse but the marriage has subsequently ended in death or divorce, the share which would have been payable under the part which has lapsed is payable to the deceased’s personal representatives.

Where a gratuity may be payable to the personal representatives of a person who has died in retirement without leaving any dependants, where the deceased was a participant in the scheme at any time on or after 1st April 1995 the amount of the gratuity is calculated by reference to the increased death in service gratuity.

Section 4(3)(g) of the European Parliament (Pay and Pensions) Act 1979 confers express power to make an Order retrospective in effect. This Order has effect from 1st April 1995.