Paragraph 1
In these Regulations, “final remuneration” means the greater of—
the highest emoluments of a person as a Member of the House of Commons and/or as an office holder which are assessable to income tax under Case I or II of Schedule E and upon which tax liability has been determined for any period of 12 months in the 5 years preceding the relevant date,
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and
the yearly average of the total emoluments of a person as a Member of the House of Commons and/or as an office holder which are assessable to income tax under Case I or II of Schedule E and upon which tax liability has been determined for any 3 or more consecutive years ending not earlier than 10 years before the relevant date.
Provided that—
where final remuneration is computed by reference to any year other than the last complete year ending on the relevant date, the contributor’s remuneration (as calculated in (a) above) or total emoluments (for the purposes of (b) above) of any year may be increased in proportion to any increase in the index from the last day of that year up to the relevant date;
an early retirement pension in payment under the principal Regulations may not be included in final remuneration;
a contributor in receipt of a much reduced remuneration by reason of incapacity for more than 10 years up to the relevant date may calculate final remuneration under (a) or (b) above with the final remuneration calculated at the cessation of normal pay and increased in accordance with the index;
and in relation to a Class A contributor
final remuneration shall not exceed the permitted maximum.
For the purposes of providing immediate benefits at the relevant date it will be permitted to calculate final remuneration on the appropriate basis above using remuneration assessable to tax under Case I or II of Schedule E and upon which tax liability has not been determined. On determination of this liability final remuneration must be recalculated. Should this result in a lower final remuneration then benefits in payment should be reduced as necessary. Where final remuneration is greater it will be possible to augment the benefits in payment. Such augmentation, however, must take the form of an annuity.
Where immediate benefits are not being provided or where a transfer payment is to be made in respect of accrued pension benefits then final remuneration may only be calculated using remuneration assessable to income tax under Case I or II of Schedule E and upon which tax liability has been determined.