# Pensions Act 2004, Paragraph 28

Extent: E+W+S

(1) This paragraph provides for the increases mentioned in sub-paragraph (3)(b) of paragraphs 3, 5, 8, 11, 15 and 22.
(2) Where a person is entitled to periodic compensation under any of those paragraphs, he is entitled, on the indexation date, to an increase under this paragraph of—
(a) the appropriate percentage of the amount of the underlying rate immediately before that date, or
(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which he was so entitled.
Where a person is entitled to periodic compensation under any of those paragraphs, the person is entitled, on the indexation date, to an increase under this paragraph of—
(a) where sub-paragraph (2A) applies, the aggregate of the amount mentioned in sub-paragraph (2C) and the amount mentioned in sub-paragraph (2E);
(b) where sub-paragraph (2B) applies, the aggregate of the amount mentioned in sub-paragraph (2D) and the amount mentioned in sub-paragraph (2E);
(c) in any other case, the amount mentioned in sub-paragraph (2E).
(2A) This sub-paragraph applies where, immediately before the assessment date—
(a) the admissible rules of the scheme included a requirement for all or any part of so much of the annual rate of a pension in payment under the scheme as is attributable to a person’s pre-1997 service to be increased annually,
(b) that requirement did not apply only in relation to a guaranteed minimum pension provided by the scheme or for the purposes of complying with a GMP equalisation obligation, and
(c) that requirement applied in relation to pre-1997 service in respect of which the compensation is payable.
(2B) This sub-paragraph applies where—
(a) the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period,
(b) that accrual was in relation to GMP indexed service in respect of which the compensation is payable, and
(c) sub-paragraph (2A) does not apply.
(2C) The amount mentioned in this sub-paragraph is—
(a) the appropriate percentage of the amount of the pre-1997 underlying rate immediately before the indexation date, or
(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.
(2D) The amount mentioned in this sub-paragraph is—
(a) the appropriate percentage of the amount of the notional pre-1997 underlying rate immediately before the indexation date, or
(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.
(2E) The amount mentioned in this sub-paragraph is—
(a) the appropriate percentage of the amount of the post-1997 underlying rate immediately before the indexation date, or
(b) where the person first became entitled to the periodic compensation during the period of 12 months ending immediately before that date, 1/12th of that amount for each full month for which the person was so entitled.
(2F) In any case where it is unclear to the Board whether, immediately before the assessment date, the admissible rules of the scheme included a requirement of the kind mentioned in sub-paragraph (2A)(a), this paragraph has effect as if the scheme included such a requirement.
(2G) In any case where it is unclear to the Board whether, immediately before the assessment date, a requirement of the scheme of a kind mentioned in sub-paragraph (2A)(a) (including such a requirement included by virtue of sub-paragraph (2F)) applied in relation to particular pre-1997 service, this paragraph has effect as if the requirement applied in relation to such service.
(2H) In any case where it is unclear to the Board whether the scheme provided a guaranteed minimum pension that accrued during the GMP indexation period, this paragraph has effect as if the scheme so provided.
(2I) In any case where it is unclear to the Board whether the accrual of a guaranteed minimum pension provided by the scheme (including by virtue of sub-paragraph (2H)) was in relation to particular GMP indexed service, this paragraph has effect as if the accrual was in relation to such service.
(3) In sub-paragraph (2) sub-paragraphs (2) to (2E)—
“appropriate percentage” means the lesser of—
(a)the percentage increase in the general level of prices in Great Britain for the period of 12 months ending with the 31st May last falling before the indexation date, and
(b)2.5%;
“indexation date” means—
(a)the 1st January next falling after a person first becomes entitled to the periodic compensation, and
(b)each subsequent 1st January during his lifetime;
“underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—
(a)so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and
(b)the amount within sub-paragraph (3)(b) of that paragraph immediately before the indexation date;
“underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—
(a)so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service,
(b)so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to post-1997 service, and
(c)the amount within sub-paragraph (3)(b) of that paragraph immediately before the indexation date.
“notional pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—
(a)a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and
(b)so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;
“notional pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—
(a)a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,
(b)a prescribed percentage of so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and
(c)so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date;
“post-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—
(a)so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and
(b)so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;
“post-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—
(a)so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service,
(b)so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to post-1997 service, and
(c)so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date;
“pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 3 or 22, the aggregate of—
(a)so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service, and
(b)so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amount within paragraph (a) of this definition immediately before the indexation date;
“pre-1997 underlying rate” means, in the case of periodic compensation under paragraph 5, 8, 11 or 15, the aggregate of—
(a)so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to pre-1997 service,
(b)so much of the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question as is attributable to pre-1997 service, and
(c)so much of the amount within sub-paragraph (3)(b) of that paragraph as is referable to the amounts within paragraphs (a) and (b) of this definition immediately before the indexation date.
(3A) For the purposes of paragraph (a) of the definition of “appropriate percentage” in sub-paragraph (3), the Secretary of State may (from time to time) decide, as the Secretary of State thinks fit, the manner in which percentage increases in the general level of prices in Great Britain are to be determined.
(3B) The Secretary of State must publish any decision made under sub-paragraph (3A).
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) Where a portion of periodic compensation under one of the paragraphs mentioned in sub-paragraph (1) has been commuted under paragraph 24—
(a) for the purposes of sub-paragraph (2), each definition of “underlying rate” sub-paragraphs (2C) to (2E), each definition of “notional pre-1997 underlying rate”, “post-1997 underlying rate” and “pre-1997 underlying rate” in sub-paragraph (3) applies as if the reference in paragraph (a) of the definition to the amount mentioned in sub-paragraph (3)(a) of the paragraph in question was a reference to that amount reduced by the commutation percentage, ...
(b) that amount (as so reduced) is attributable to post-1997 service and pre-1997 service in the same proportions as that amount would have been so attributable had no part of the periodic compensation been commuted.
(c) for the purposes of sub-paragraph (2), the definition of “underlying rate” sub-paragraphs (2C) to (2E), the definition of “notional pre-1997 underlying rate”, the definition of “post-1997 underlying rate” and the definition of “pre-1997 underlying rate” in the case of periodic compensation under paragraph 5, 8, 11 or 15 applies as if the reference in paragraph (b) of the definition to the amount mentioned in sub-paragraph (3)(aa) of the paragraph in question was a reference to that amount reduced by the commutation percentage, and
(d) that amount (as so reduced) is attributable to post-1997 service and pre-1997 service in the same proportions as that amount would have been so attributable had no part of the periodic compensation been commuted.
(5A) The amount mentioned in sub-paragraph (3)(aa) of paragraph 5, 8, 11 or 15 is attributable—
(a) to post-1997 service, in so far as it relates to so much of the amount mentioned in sub-paragraph (3)(a) of the paragraph in question as is attributable to post-1997 service, and
(b) to pre-1997 service, in so far as it relates to so much of that amount as is attributable to pre-1997 service.
(5B) Where the commencement of periodic compensation under paragraph 5, 8, 11 or 15 has been postponed by virtue of paragraph 25A, this paragraph applies as if the person first becomes entitled to periodic compensation under the paragraph in question on the day on which the periodic compensation commences.
(6) In this paragraph—
“GMP equalisation obligation” means any obligation under an enactment, a rule of law or the scheme rules which relates to the removal of inequalities as between men and women in respect of the provision of a guaranteed minimum pension;
“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;
“GMP indexed service” means—
(a)pensionable service which is within paragraph 36(4)(a) and occurs during the GMP indexation period, or
(b)pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;
“guaranteed minimum pension” has the same meaning as in the Pension Schemes Act 1993 (see section 8(2) of that Act);
“post-1997 service” means—
(a)pensionable service which is within paragraph 36(4)(a) and occurs on or after 6th April 1997, or
(b)pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;
“pre-1997 service” means—
(a)pensionable service which is within paragraph 36(4)(a) and occurred before 6th April 1997, or
(b)pensionable service which is within paragraph 36(4)(b) and meets such requirements as may be prescribed;
“the commutation percentage”, in relation to periodic compensation, means the percentage of that compensation commuted under paragraph 24.
(7) But in this paragraph, in relation to any relevant pension credit amount, “post-1997 service” and “pre-1997 service” , “pre-1997 service” and “GMP indexed service” have such meanings as may be prescribed.
(8) In sub-paragraph (7), “relevant pension credit amount” means an amount mentioned in sub-paragraph (3)(a) of—
(a) paragraph 3,
(b) paragraph 5, or
(c) paragraph 15 as it applies by virtue of paragraph 21 or 21A ,
which is attributable (directly or indirectly) to a pension credit.
(9) This paragraph is subject to paragraph 29 (Board’s power to alter rates of revaluation and indexation).

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Source: https://www.legislation.gov.uk/ukpga/2004/35/schedule/7/paragraph/28 (the official version)
Page: https://openlegislation.uk/pensions-act-2004/schedule-7/paragraph-28
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.