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Regulation 2 The earnings cap and maximum pensions

Original text. Later amendments are not shown.

(1)

Regulation A2 of the Contributory Fund Regulations (interpretation) is amended as specified in paragraphs (2) and (3).

(2)

In paragraph (1)—

(a)

after the definition of “guaranteed minimum pension”f1 insert—

  • ““index” means the retail prices index, as defined for the purposes of the Income Tax Acts by section 833(2) of the Taxes Act 1988f2 and, except in paragraphs (1B) and (1C) of this regulation, references to the index at any time are to the index for the calendar month three months before that time;”,

(b)

for the definition of “permitted maximum” substitute—

  • ““permitted maximum”, except in regulation G1(5)(a), (b)(i), (c), (5B)(a), (5C)(a) and (5D)—

    1. (a)

      in relation to the tax years 1988-89 and 1989-90, means £60,000,

    2. (b)

      in relation to any other tax year before the tax year 2006-07, means the figure specified for that tax year in an order made under section 590C of the Taxes Act 1988, and

    3. (c)

      in relation to any later tax year, means the figure found for that year by virtue of paragraphs (1A) to (1C) of this regulation;

    and, except where the context indicates otherwise, references to the permitted maximum in relation to a person mean the permitted maximum for the tax year in which the person ceases to be a participant;”, and

(c)

after the definition of “qualifying office” insert—

  • ““registered pension scheme” has the same meaning as in Part 4 of the Finance Act 2004 (see section 150(2) of that Act);”.

(3)

After paragraph (1) insert—

“(1A)

The figure is £108,600, subject to paragraphs (1B) and (1C) of this regulation.

(1B)

If the index for the month of September preceding the tax year 2007-08 or any later tax year is higher than it was for the previous September, the figure for that year shall be an amount arrived at by—

(a)

increasing the figure for the previous tax year by the same percentage as the percentage increase in the index, and

(b)

if the result is not a multiple of £600, rounding it up to the nearest amount which is such a multiple.

(1C)

If the index for the month of September preceding the tax year 2007-08 or any later tax year is not higher than it was for the previous September, the figure for that year shall be the same as for the previous tax year.”.

(4)

Schedule 2 to those Regulations (maximum pensions) is amended as follows.

(5)

In paragraph 1 (interpretation)—

(a)

for the definition of “index” substitute—

  • ““pension value”, in relation to a person’s retained benefits, means—

    1. (a)

      in the case of a pension to which the person is actually entitled, the annual amount of the pension, adjusted in accordance with guidance issued from time to time by the Government Actuary in any case specified in the guidance where the amount of the pension may fluctuate,

    2. (b)

      in the case of a lump sum to which the person has become entitled, the annual amount, as calculated in accordance with such guidance, of a pension payable from the Fund to someone of the person’s description that has a value equal to that sum, and

    3. (c)

      in the case of a benefit to which the person is prospectively entitled, the annual amount, as calculated in accordance with such guidance, of a pension payable from the Fund to someone of the person’s description that has a value equal to the value of that benefit;”, and

(b)

in the definition of “retained benefits” for the words from the beginning to the end of paragraph (e) substitute—

  • ““retained benefits”, in relation to a participant, means benefits for the participant that—

    1. (a)

      are derived from a registered pension scheme, or

    2. (b)

      were retained benefits in relation to the participant for the purposes of this Schedule immediately before 6th April 2006,”.

(6)

In paragraph 3(4) (restriction of Class A member’s total retirement benefit under the Contributory Fund Regulations and additional voluntary contributions to one thirtieth of the permitted maximum for each year of service) omit “total”, in the first and third places where it occurs, and “from any free-standing additional voluntary contributions scheme and from any other additional voluntary contributions”.

(7)

In paragraph 3(5)f3 omit “total”.

Annotations

Footnotes

f1

This definition was substituted by regulation 2(f) of S.I. 2004/2416.

f2

Section 833(2) was amended by paragraph 22 of Schedule 2 to the Transfer of Functions (Registration and Statistics) Order 1996 (S.I. 1996/273).

f3

Paragraph 3(5) of Schedule 3 was inserted by paragraph 16(a) of Schedule 1 to S.I. 2001/2649.