Explanatory note

These Regulations provide for allowances to be paid to persons who have been subject to the Federated Superannuation System for Universities (FSSU) and who have retired from the Civil Service.

The allowances correspond to the increases for which the persons concerned would have been eligible under the Pensions (Increase) Act 1971 if they had been pensionable in the normal way under the principal Civil Service scheme, but are modified so as to be applicable to benefits based on an insurance scheme.

For an employee whose period of F.S.S.U. service ends after the Regulations come into operation, the allowance will be calculated on an “appropriate pension rate” corresponding broadly to the pension benefits which he would have received if that service had been subject to the principal civil service pension scheme. The allowance will include also any amount by which that “appropriate pension rate” exceeds his “annuity value”. His “annuity value” (defined in regulation 7) is the best annuity which could be purchased with the capital sum payable, or estimated to be payable, on his F.S.S.U. policies at the date of his retirement (or, if later, the date of his qualifying for increases under the Regulations).

For an employee whose period of F.S.S.U. service ends not later than the coming into operation of the Regulations (and who is therefore already receiving an allowance calculated on a “notional annuity” or “hypothetical annuity” calculated in accordance with earlier Pensions Increase (Federated Superannuation System for Universities) Regulations) an allowance calculated broadly on the basis indicated in the previous paragraph will be payable except where it is more advantageous for the pensioner to receive his existing allowance with the addition of any age supplement payable under section 6(5) of the 1971 Act and of the appropriate percentage increase under section 1 of that Act in respect of the rise of the cost of living after 1st April 1969 (the latter being calculated on the total of the notional or hypothetical annuity, the existing allowance and any age supplement).

The Regulations continue to give effect to the arrangements (of which the civil service element was introduced by the F.S.S.U. (Pensions Increase) Regulations 1969 (S.I. 1969/1321)) whereby an employee who retires from the civil service, a university, or one of the bodies listed in Schedule 2 to the Regulations, will have his F.S.S.U. pension benefits augmented by his last employer in respect of the whole of his period of F.S.S.U. service.

In accordance with the power conferred by section 13(5) of the Act, the Regulations provide for increases to take effect from 1st September 1971. The Regulations also provide for further increases to be paid on the occasion of any orders made under section 2 of the Act in consequence of annual reviews of public service pensions.