# Pensions Act 2008, Paragraph 17

Extent: E+W+S

(1) This paragraph provides for annual increases to compensation payable to the transferee.
(2) Subject to sub-paragraph (3), the transferee is entitled, on each indexation date, to an increase of—
(a) where sub-paragraph (2A) applies, the amount mentioned in sub-paragraph (2E);
(b) where sub-paragraph (2B) applies, the amount mentioned in sub-paragraph (2F);
(c) where sub-paragraph (2C) applies, the amount mentioned in sub-paragraph (2G);
(d) where sub-paragraph (2D) applies, the amount mentioned in sub-paragraph (2H).
(2A) This sub-paragraph applies where—
(a) the transferor's PPF compensation is payable in accordance with paragraph 3, 5, 8, 11, 15 or 22 of Schedule 7 to the Pensions Act 2004 (“the relevant Schedule 7 provisions”), and
(b) immediately before the assessment date—
(i) the admissible rules of the scheme in respect of which that compensation is payable 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,
(ii) 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
(iii) that requirement applied in relation to pre-1997 service in respect of which that compensation is payable.
(2B) This sub-paragraph applies where—
(a) the transferor's PPF compensation is payable in accordance with the relevant Schedule 7 provisions,
(b) the scheme in respect of which that compensation is payable provided a guaranteed minimum pension that accrued during the GMP indexation period,
(c) that accrual was in relation to GMP indexed service in respect of which that compensation is payable, and
(d) sub-paragraph (2A) does not apply.
(2C) This sub-paragraph applies where—
(a) the transferor's PPF compensation is payable in accordance with the relevant Schedule 7 provisions, and
(b) neither sub-paragraph (2A) nor sub-paragraph (2B) applies.
(2D) This sub-paragraph applies where the transferor's PPF compensation is payable otherwise than in accordance with the relevant Schedule 7 provisions.
(2E) The amount mentioned in this sub-paragraph is the aggregate of the appropriate percentage of the pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.
(2F) The amount mentioned in this sub-paragraph is the aggregate of the appropriate percentage of the notional pre-1997 underlying rate and the appropriate percentage of the post-1997 underlying rate.
(2G) The amount mentioned in this sub-paragraph is the appropriate percentage of the post-1997 underlying rate.
(2H) The amount mentioned in this sub-paragraph is the appropriate percentage of the general underlying rate.
(3) The increase to which the transferee is entitled on the first indexation date is restricted to 1/12 of the amount calculated under sub-paragraph (2E), (2F), (2G) or (2H) (as the case may be) for each full month in the period beginning with the transfer day and ending with that indexation date.
(3A) For the purposes of sub-paragraphs (2A) to (2C)—
(a) 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)(b)(i), those sub-paragraphs have effect as if the scheme included such a requirement;
(b) 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)(b)(i) (including such a requirement included by virtue of paragraph (a)) applied in relation to particular pre-1997 service, those sub-paragraphs have effect as if the requirement applied in relation to such service;
(c) 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, those sub-paragraphs have effect as if the scheme so provided;
(d) 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 paragraph (c)) was in relation to particular GMP indexed service, those sub-paragraphs have effect as if the accrual was in relation to such service.
(4) For the purposes of sub-paragraphs (2) to (2H)—
“the appropriate percentage”, as at an indexation date, is 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 31 May last falling before that date, and
(b)2.5%;
“the indexation date” means—
(a)the 1 January next falling after the transferee first becomes entitled to the periodic compensation, and
(b)each subsequent 1 January during the transferee's lifetime;
“the general underlying rate”, as at an indexation date, is the aggregate of—
(a)the general indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,
(b)so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and
(c)so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);
“the notional pre-1997 underlying rate”, as at an indexation date, is the aggregate of—
(a)the notional pre-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,
(b)so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and
(c)so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);
“the post-1997 underlying rate”, as at an indexation date, is the aggregate of—
(a)the post-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,
(b)so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and
(c)so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b);
“the pre-1997 underlying rate”, as at an indexation date, is the aggregate of—
(a)the pre-1997 indexed proportion of the aggregate of the initial annual rate of compensation and (in the case of compensation payable under paragraph 6), the revaluation amount,
(b)so much of any actuarial increase under paragraph 16A as relates to the amount in paragraph (a), and
(c)so much of any annual increase to which the transferee is entitled under this paragraph in respect of earlier indexation dates as relates to the amounts in paragraphs (a) and (b).
(4A) For the purposes of paragraph (a) of the definition of “the appropriate percentage” in sub-paragraph (4), 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.
(4B) The Secretary of State must publish any decision made under sub-paragraph (4A).
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6A) For the purposes of paragraph (a) of the definition of “the general underlying rate”, “the general indexed proportion” is such proportion as is determined in accordance with regulations made by the Secretary of State.
(6B) For the purposes of paragraph (a) of the definition of “the notional pre-1997 underlying rate”, “the notional pre-1997 indexed proportion” is such proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of Schedule 7 to the Pensions Act 2004 under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service as may be prescribed.
(6C) For the purposes of paragraph (a) of the definition of “the post-1997 underlying rate”, “the post-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to post-1997 service.
(6D) For the purposes of paragraph (a) of the definition of “the pre-1997 underlying rate”, “the pre-1997 indexed proportion” is the proportion of the amount mentioned in sub-paragraph (3)(a) of the paragraph of that Schedule under which the transferor’s PPF compensation is payable that is attributable to pre-1997 service.
(7) Where the compensation payable to the transferee is—
(a) reduced as a result of the commutation of periodic compensation under paragraph 9, or
(b) restricted under regulations under paragraph 18 (compensation cap),
the references in paragraph (a) of the definition of “the general underlying rate”, the definition of “the notional pre-1997 underlying rate”, the definition of “the post-1997 underlying rate” and the definition of “the pre-1997 underlying rate” in sub-paragraph (4) above to the initial annual compensation rate and the revaluation amount are to that rate and that amount as so restricted or reduced (and paragraph (aa) of the definition applies accordingly).
(7A) Where the commencement of periodic compensation has been postponed by virtue of paragraph 16A, this paragraph applies as if the transferee first becomes entitled to the periodic compensation on the day on which the periodic compensation commences.
(8) The definition of “the appropriate percentage” in sub-paragraph (4) is subject to paragraph 20 (power of Board to alter rates of revaluation and indexation).
(9) In this paragraph—
“GMP equalisation obligation” has the same meaning as in paragraph 28 of Schedule 7 to the Pensions Act 2004 (annual increase in periodic pension compensation);
“GMP indexation period” means the period beginning with 6 April 1988 and ending with 5 April 1997;
“guaranteed minimum pension” has the same meaning as in the Pension Schemes Act 1993 (see section 8(2) of that Act);
“post-1997 service”, “pre-1997 service” and “GMP indexed service” have the same meaning as in paragraph 28 of Schedule 7 to the Pensions Act 2004;
“the assessment date” and “admissible rules”, in relation to a pension scheme, have the same meaning as in that Schedule (see paragraphs 2 and 35 of that Schedule);
“the commutation percentage”, in relation to periodic compensation, means the percentage of that compensation commuted under paragraph 9.

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Source: https://www.legislation.gov.uk/ukpga/2008/30/schedule/5/paragraph/17 (the official version)
Page: https://openlegislation.uk/pensions-act-2008/schedule-5/paragraph-17
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.